Sustainability Governance

Sustainability-related topics (including issues relating to climate change mitigation and adaptation) 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.

The Executive Board 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 reports to the Supervisory Board on a regular and ad-hoc basis. The Supervisory Board appoints members of the Executive Board, monitors and supervises its decisions, and advises the Executive Board on strategy development.

At Group level, responsibility for 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.

This team works in close collaboration with the various Group functions that are responsible for implementing OMV’s Sustainability Framework. In this diagram, we map the coverage of sustainability topics by key corresponding Group functions. 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. They include reporting on progress in the implementation of the Sustainability Framework and related targets, presenting important events with regard to the material topics, and submitting for approval implementation plans for sustainability initiatives.

In 2021, we began a review of our sustainability governance structure. As a first result, a new committee was created at Supervisory Board level, the Sustainability and Transformation Committee. The purpose of the Sustainability and Transformation Committee is to support the Company’s Supervisory Board in reviewing and monitoring OMV’s strategy with regard to sustainability; ESG-related standards, performance, and processes; as well as HSSE (Health, Safety, Security, Environment) performance and, in particular, climate change. Furthermore, the Committee serves to support and oversee the transformation process toward a more sustainable business model, including the cultural integration of strategically significant acquisitions. In 2022, we will continue to evaluate our existing sustainability governance processes and take action to implement new structures in 2022, if deemed necessary.

Executive Remuneration

The Supervisory Board appoints among its members qualified expert committees that support the decision-making of the Supervisory Board. 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. The variable remuneration – the Long-Term Incentive Plan (LTIP) and the annual bonus – includes performance criteria related to the Company’s sustainability and GHG performance.

Following shareholder engagement and feedback during corporate governance roadshows in autumn 2019, the Remuneration Committee decided to put an even stronger emphasis on sustainability and environmental topics. The Executive Remuneration Policy introduced in 2020 includes a greenhouse gas (GHG) emissions reduction target and a diversity target in the Long-Term Incentive Plan. In addition, the annual bonus calculation is subject to a Sustainability Multiplier. The Sustainability Multiplier as part of the annual bonus is determined at the discretion of the Supervisory Board based on a predefined set of criteria that are selected due to their importance for OMV’s sustainability performance. The set of criteria for the Sustainability Multiplier 2021 includes workplace accidents involving fatalities, TRIR, number and volume of oil spills, as well as progress on concrete sustainability projects including, but not limited to, carbon reduction measures. Starting in 2022, the Sustainability Multiplier will be changed to a Safety Multiplier. GHG emissions reductions and diversity targets will also separately form a part of the annual bonus.

In addition to including a GHG emissions reduction target and diversity target in the LTIP, a Health, Safety, Security, and Environmental (HSSE) malus may also be applied to the overall target achievement. In situations where a severe health, safety, and security, or environmental breach has occurred, the Remuneration Committee can reexamine the level of the LTIP payout and, depending on the extent of the infraction, reduce it at its reasonable discretion, to zero if necessary.

Selected employees at senior management level are also eligible to participate in the LTIP.

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