Sustainability Governance

Sustainability topics are fully integrated into the overall governance structure of the Company. These topics have the same weight as any other business consideration and, following the Company’s responsible approach to business, are integrated into the daily operation and management processes of the Company. For instance, sustainability criteria form part of the Capital Allocation Framework. due diligence is also part of mergers and acquisitions.

Governance Structure

OMV has a two-tier governance structure. The Executive Board, composed of the CEO, CFO, Chemicals, EVP Fuels & Feedstock, and EVP Energy, is the highest managing body of the Company and is responsible for setting and implementing the Company strategy, including climate and other sustainability targets. The Executive Board holds meetings at least every two weeks to exchange information and issue decisions on all matters requiring plenary approval.

The Supervisory Board is OMV’s highest governing body and consists of ten members elected by the General Meeting (shareholders’ representatives) and five members delegated by the Group’s Works Council. The Supervisory Board appoints members of the Executive Board, monitors and supervises its decisions, and advises the Executive Board on strategy development. The Supervisory Board also assesses the performance of the Executive Board, including on sustainability criteria. The Executive Board reports to the Supervisory Board on a regular and ad hoc basis. The Supervisory Board appoints among its members qualified expert committees that support the decision-making of the Supervisory Board. OMV’s management of sustainability issues is overseen and steered by the Supervisory Board’s Sustainability & Transformation Committee. This includes oversight of all material sustainability topics (e.g., health, safety and security, carbon emissions reduction, circular economy, etc.) and their related and targets. In 2022, the Chairman of the Supervisory Board again met with many of the largest OMV investors on a Corporate Governance Roadshow. ESG topics were among the focus areas discussed.

In 2022, the newly established Sustainability & Transformation Committee started holding regular meetings. This committee meets on a quarterly basis to discuss and steer topics such as regulatory ESG requirements including non-financial reporting requirements, ESG-related capital market activities, ESG governance and steering, and critical incidents related to sustainability (e.g., human rights violations and significant incidents). In each meeting of the full Supervisory Board, the Sustainability & Transformation Committee gives a report to the entire plenary. The Sustainability & Transformation Committee and the entire Supervisory Board review and approve the OMV Group Sustainability Report every year. OMV’s Supervisory Board benefits from a training program to learn about relevant topics, including ESG-related fields of interest. In 2022, circularity and sustainable fuels and feedstocks were included in the content of the training program.

A self-assessment of the Supervisory Board is performed on an annual basis with the help of an external consultant. Among other things, the self-assessment carried out in 2021 stressed the need to further increase expertise in the area of sustainability, innovation, and climate change – by means of training as well as by considering sustainability transformation skills when nominating new members for the Supervisory Board of OMV Aktiengesellschaft. In addition to further training on the sustainability transformation, Jean-Baptiste Renard, who accompanied the transformation of Neste as non-executive director, was consequently elected to OMV’s Supervisory Board at the Annual General Meeting 2022.

The results of the self-assessment in 2022 mentioned the high-quality work of the Sustainability & Transformation Committee in the year of its constitution. They emphasized the importance of continuity in the oversight of topics and the benefit of deep dives into strategic focus areas, and suggested further training on ESG in the oil, gas, and chemicals industry.

Sustainability Governance (organizational chart)

Executive Remuneration

The Supervisory Board assesses the performance of the Executive Board, including on the implementation of the sustainability strategy. The Remuneration Committee is authorized to determine the Executive Board’s remuneration, including the structure of the remuneration system and the actual target achievement. The Executive Board remuneration consists of fixed and variable remuneration elements. Selected employees at senior management level are also eligible to participate in the Long-Term Incentive Plan (). The variable remuneration – LTIP and the annual bonus – includes performance criteria related to the Company’s sustainability and greenhouse gas () performance.

Long-term shareholder and other stakeholder interests are reflected in the performance-related remuneration, which includes both long-term and short-term elements. Feedback received as part of the regular dialogue with shareholders has helped to refine the Policy. Following shareholder engagement and feedback at the Annual General Meeting 2021, as well as during the Corporate Governance Roadshow 2021, the Remuneration Committee decided to reduce the Remuneration Policy’s complexity by reducing the number of key performance indicators (KPIs) and implementing a standardized health and safety malus instead of the current sustainability multiplier in the annual bonus and the HSSE malus in the LTIP. Clawbacks now apply to all variable remuneration elements. Furthermore, in keeping with OMV’s Strategy 2030 and to foster the Company’s transformation, KPIs measuring operational excellence and strategy implementation were included in the annual bonus. In addition, environmental, social, and governance (ESG) targets are weighted more strongly in the variable remuneration.

The Remuneration Policy approved at the Annual General Meeting in June 2022 foresees ESG targets forming part of the annual bonus and LTIP. 15% of the annual bonus depends on the achievement of an ESG target, namely the reduction of net absolute GHG emissions. 30% of the LTIP is also based on the achievement of ESG targets. The Remuneration Committee has established an OMV specific catalog of criteria derived from the Company’s Sustainability Strategy. The Remuneration Committee chooses the ESG targets and their weighting for each LTIP tranche based on this catalog. GHG emissions reduction will always constitute a target in the . ESG targets and their weighting are published in the Remuneration Report for the grant year.

Based on predefined criteria (e.g., fatalities, , process safety – also in comparison to industry benchmarks), a health and safety malus of between 0.8 and 1.0 is applied to the overall target achievement for both the annual bonus and the LTIP. In the event of severe incidents, the Remuneration Committee may reduce the payout to zero. This malus considers OMV’s commitment to health and workplace safety.

An external review  of actual target achievement is performed by the Group’s auditor, and the results are communicated to the Remuneration Committee and Supervisory Board.

Management of Sustainability Impacts

The Executive Board is responsible for managing the organization’s impact on the economy, environment, and people. This includes oversight of all material topics described in this report, such as climate change mitigation and adaptation, human rights, safety, etc. At Group level, responsibility for driving OMV’s sustainability agenda, sustainability reporting, and ESG governance lies with the Carbon, Energy & ESG Management team in Investor Relations & Sustainability, which is the responsibility of the CFO. The team works across the business to determine gaps in sustainability performance, define expectations, conduct benchmarking, and develop best practices.

The team works in close collaboration with the various Group functions that are responsible for implementing OMV’s Sustainability Framework. Further details are disclosed in the Governance descriptions of each material topic found throughout this Report.

Group functions continuously develop and steer the processes relevant to the implementation of activities relating to social and environmental performance, and propose an action plan to functional experts in related business units on the ground. The functional experts remain in continuous communication regarding progress on the planned implementation. Each Group function reports directly to the Executive Board on the relevant social and environmental issues in conjunction with the Carbon, Energy & ESG Management team. This includes reporting on progress in the implementation of the Sustainability Framework on a quarterly basis, presenting important events with regard to the material topics, and submitting implementation plans for sustainability initiatives for approval.

Sustainability Criteria in Investment Decisions

Our sustainability ambitions, especially getting to net zero, can only be achieved with considerable effort and capital allocation. In our Strategy 2030, we have earmarked investments of more than EUR 13 bn for the purpose of achieving our emissions reduction targets.

In 2022, OMV updated its Capital Allocation Framework and developed a strategic scoring methodology for investment projects based on four pillars: business strategic targets, financial metrics, risk profile, and climate targets impact. This new methodology has been tested in a pilot phase. The scoring helps to objectively define and review OMV’s most important strategic projects and allows for holistic portfolio optimization across the OMV Group to support our strategy delivery, including our GHG reduction pathway. Climate scoring is an integral part of this overall scoring and covers the investment’s impact on the OMV Group’s Scope 1, 2, and 3 climate targets for 2030, as well as taxonomy relevance.

As part of the updated Capital Allocation Framework, OMV also introduced a new definition for “sustainability ,” which encompasses investments that meet one of two criteria: either they are aligned with the EU taxonomy or they are investments that support the implementation of OMV’s 2030 Sustainability Framework. The latter includes investments related to methane leakage detection and repair, energy efficiency programs, chemical recycling, and community investments classified as strategic social investments, among others.

For sustainability projects to pass the final investment decision, more relaxed financial hurdles apply compared to those applicable to the rest of the projects in the portfolio. Thus, “sustainability CAPEX” projects use distinct “weighted average cost of capital (WACC)” rates that consider the specific risks of sustainability projects (usually lower compared to other projects) and a payback period of <20 years (longer than for other projects). The goal of the new Capital Allocation Framework is to facilitate investments in projects aligned with our climate targets, including our long-term net zero target, rather than traditional fossil fuel-related investments.

Moreover, inorganic growth projects should comply with the overall Group path to net zero by 2050 and should support the low-carbon growth of OMV. The potential impact of mergers and acquisitions on OMV’s climate targets is reviewed as part of due diligence.

environmental, social, and governance
Executive Vice President
Key Performance Indicators
Health, Safety, Security, and Environment
environmental, social, and governance
Long-Term Incentive Plan
greenhouse gas
Long-Term Incentive Plan
Total Recordable Injury Rate
European Union
capital expenditure