Slide 1: Santander ESG: Towards a more sustainable world
Santander ESG Towards a more sustainable world Q4 2022
Slide 2: Index
Índice Index 1 ESG strategy 2 Decarbonization ambition 3 Financing the green transition 4 Financial Inclusion, Empowerment & Community support 5 Corporate Governance 6 External engagement & Recognition
Slide 3: ESG strategy
ESG strategy 01
Slide 4: Our approach
ESG strategy Our approach 1. Renewable energy finance ranking based on the league tables provided by Infralogic as of January 2023 for the last 10 years as of FY2022. 4
Slide 5: Our approach: vision, strategy, actions
ESG strategy Our approach As a responsible bank we place sustainability at the centre of our core activities to deliver on our purpose of helping people & business prosper Founding Member 2021 Best bank for Financial Inclusion 2022 Our vision Our strategy Our actions is to play a major role in the f
Slide 6: Overarching goal: Focus on most material items
ESG strategy Overarching goal: Focus on most material items Ambition Goals Priority action plans SDG’s • Set targets in our portfolios to align with pathways to net zero, while taking Support the into consideration other environmental goals as Nature Deliver our Net zero ambition transition to a low
Slide 7: Our journey
ESG strategy Our journey Our journey over the past years highlights Santander’s ongoing commitment to fight climate change and contribute to a more sustainable future 2021 2022 2019 2020 2017 2018 2009 2011 • Creation of a Global • Set an ambition to be Green Finance Team • Became carbon net zero by
Slide 8: Responsible Banking ambition
ESG strategy Responsible Banking ambition We have set targets in those areas where we have the greatest potential impact. Thanks to the progress we have made towards some of the targets we set in 2019, we are considering revising our ambition in a few of them. 2018 2019 2020 2021 2022 2025/2030 targ
Slide 9: Our achievements
ESG strategy Our achievements We want to make a positive impact with actions that reflect our sustainability strategy and commitment 11,8 mn People financially >€950 mn in microcredits empowered since 2019 provided within LATAM during 2022 #1 bank worldwide 88% of electricity used by number of deals
Slide 10: Commitment from our Top Management
ESG strategy Commitment from our Top Management By delivering on our purpose to help people and businesses prosper, we grow as a business and continue to help society address its challenges “As a responsible bank, our approach to ESG issues is central to our strategy” "At Santander, we've always kno
Slide 11: Main challenges
ESG strategy Main challenges Our group strategy focuses on supporting global initiatives to tackle climate change and promote sustainable growth that is accessible for everyone Different drivers Challenges Initiatives Internal Policies and Decarbonization: Working 02 corporate culture Paris Agreemen
Slide 12: Decarbonization ambition
Decarbonization ambition 02 Back
Slide 13: Our net zero journey
Decarbonization ambition Our net zero journey In order to be aligned with the Paris Agreement and with the aim of limiting global temperature increase to 1.5°C, we have the ambition to be net zero in carbon emissions by 2050 also as part of the NZBA CO2 Net zero ambition Set up decarbonization Found
Slide 14: What do we want to achieve?
Decarbonization ambition What do we want to achieve? As one of the world’s largest banks, we have a clear role to play in financing the transition to a greener economy. We have met the goal of being carbon-neutral in our own operations in 2020, but we aim to continue progressing towards our net zero
Slide 15: Sectorial policies
Decarbonization ambition Sectorial policies Our Environmental, Social and Climate Change (ESCC) risk management policy sets out standards for investing in, and providing financial products and services to, companies and customers engaging in sensitive activities expressly prohibiting funding to (amo
Slide 16: Ranking by fossil fuels financed
Decarbonization ambition Fossil fuel financed We rank well below most of our peers in fossil fuel financing in absolute and relative terms Mandated Fossil fuels financed Fossil fuels financed Rank Arranger (Billion $) over total lending 1 Bank Bank 1 1 61,732 5.73% Santander’s fossil fuels financing
Slide 17: New targets
Decarbonization ambition New targets We have set new decarbonization targets according to our internal roadmap from last year’s Climate Finance Report. They focus on the most carbon intensive and material sectors. These new targets have been set for 2030 against 2019, for the energy (oil & gas), avi
Slide 18: Examples of some Country and Unit efforts
Decarbonization ambition Examples of some Country and Unit efforts Net zero actions and targets in Wealth Management & progress in our decarbonization strategy in Poland Wealth Management Poland strategy Road to Net Zero Committed to support the Coal phase-out 1 Climate Commitments Net Zero Actions
Slide 19: Financing the green transition
Financing the green transition 03 Back
Slide 20: Our global reach
Green Finance Our global reach Finance is a key enabler of the transition towards a low-carbon economy. We are contributing to a more sustainable economy by managing climate-related risks and opportunities, building a comprehensive sustainable and green finance proposition. We are currently working
Slide 21: Our global reach: renewable projects financed
Green Finance Our global reach The greenfield renewable energy projects we financed or advised on in 2022 have a total installed capacity of 15.6 GW and prevent the emission of 152 million tons of CO2A. We also helped expand, enhance and sustain renewable energy brownfield projects with a total inst
Slide 22: Our #1 global franchise
Green Finance Our #1 global franchise Santander has consistently been the leading Bank in financing renewable energies for the past 10 years and we aim to maintain our leadership Global Renewable Energy Project Finance Volume Europe & Americas Energy Project Finance Volume and Transactions by MLA FY
Slide 23: Green solutions for individual, SMEs and Corporate customers
Green Finance Green solutions for our individual, SMEs and Corporate customers What we finance Our customers needs… Key geographies Building on our current offering of ESG Purchase, construction and Developer loans, private solar panel products (launched in 2019), we continue to refurbishment of ene
Slide 24: Examples of some Country and Unit efforts
Green Finance Examples of some Country and Unit efforts Providing sustainable solutions to our customers in Consumer Finance & Santander España Santander Consumer Finance Santander España Green proposition already a reality Sustainable product proposition 309.413 Electric + Hybrid cars Consumer (non
Slide 25: Protecting the Amazon
Green Finance Protecting the Amazon We believe it is critical to protect the Amazon rainforest in order to tackle climate change. In July 2020, Santander Brazil announced a plan to promote sustainable development in the Amazon in collaboration with the two other largest private-sector banks in Brazi
Slide 26: Financial Inclusion, Empowerment & Community support
Financial Inclusion, Empowerment & Community support 04 Back
Slide 27: Global approach
Financial Inclusion, Empowerment & Community support Global approach At Santander we seek to provide tailored finance to those facing difficulties while trying to access credit, by designing solutions for individuals and SMEs in financial distress. The Group is leading numerous global initiatives to
Slide 28: Financial Inclusion & Empowerment - Global approach
Financial Inclusion, Empowerment & Community support Financial Inclusion & Empowerment - Global approach We continue to help people access the financial system and set up micro-businesses while we provide them with the appropriate tools to manage their finances. Santander Finance for All is our init
Slide 29: Financial Inclusion & Empowerment - Key initiatives
Financial Inclusion, Empowerment & Community support Financial Inclusion & Empowerment - Key initiatives We are proud to have developed financial inclusion initiatives that have been successfully implemented in the LATAM region Prospera is the largest microfinance Launched in 2017, Tuiio is a financ
Slide 30: Community support - Higher Education
Financial Inclusion, Empowerment & Community support Community support - Higher Education We believe education is the bedrock of financial inclusion and customer protection, that is why it sits at the core of our Responsible Banking agenda, and it is fostered through different initiatives Education
Slide 31: Corporate Governance
Corporate Governance 05 Back
Slide 32: Our strengths
Corporate Governance Our strengths As a responsible bank we have a clear, robust governance. Best practices on governance are channelled to all our subsidiaries, as part of our global Governance Model • High participation in our General • Commitment to maximise the disclosure and quality Effective e
Slide 33: Our strengths
Corporate Governance Our strengths We strive to have a clear and robust governance with well-defined accountability and a prudent management of risks and opportunities to ensure: 1 2 3 4 5 Respect for A balanced Board Maximum Be at the forefront of Embedding ESG in shareholders’ rights composition t
Slide 34: Board composition
Corporate Governance Board composition Our Board composition ensures an ongoing effective supervision supported by a well-balanced committee structure Number of Geographical Independent Board Women on Directors diversity members Board 15 6 66.6% 40% Directors Spanish, US, Portuguese, 4.05 average Ac
Slide 35: Executive variable remuneration
Corporate Governance Executive variable remuneration Annual bonus for executive directors subject to meeting financial and non-financial targets Aligned with our Aligned with strategic goals A B shareholder interests • Annual bonus determined by • 50% of variable remuneration is both financial and n
Slide 36: ESG in Reward
Corporate Governance ESG in Reward Weights Equally weighted ESG action lines included 2022-2024 2023-2025 RoTE 40% • Women in senior positions • Women in senior positions • Financially empowered people • Financial inclusion LTI RTSR 40% • Green finance mobilized • Green finance mobilized and • Setti
Slide 37: External engagement & Recognition
External engagement & Recognition 06
Slide 38: Partnerships & initiatives
External engagement & Recognition Partnerships & initiatives We drive our responsible banking agenda through a number of local and international initiatives and working groups, which include among others: UNEP Finance initiative. We are a founding World Business Council for Sustainable Development U
Slide 39: ESG Ratings
External engagement & Recognition ESG Ratings We engage with ESG ratings to signal our progress and keep improving with their feedback Rating Agcy. 2022 2021 Evol. MSCI index MSCI index = AA AA Highlights in 2022 * 22.4 23.9 → We maintained our positioning on the MSCI World Index. And we’ve consec
Slide 40: Annexes
Annexes
Slide 41: Main contact details
ESG in Investor Relations Main contact details Begoña Morenés: Global Head of Shareholder and Investor Relations (bmorenes@gruposantander.com) Fernando Donoso: Equity & ESG (fdonoso@gruposantander.com) Tosin Iduh: ESG (oiduhija@gruposantander.com) 41
Slide 42: Reports and additional information
Transparency & Disclosure Reports and additional information Please click on the below images to consult public details highlighted in this presentation Climate Finance 2022 Annual report Corporate Governance report presentation www.santander.com 42
Slide 43: Group wide ambition to be Net Zero carbon emissions by 2050
Santander Climate strategy and four Pillars Group wide ambition to be Net Zero carbon emissions by 2050 Aligning our portfolio to meet Supporting our customers in Reducing our environmental Embedding climate into risk the Paris agreement goals their green transition impact management Align portfolio
Slide 44: Ensuring we have the lowest possible impact on the environment
Environmental footprint Ensuring we have the lowest possible impact on the environment 44
Slide 45: Current exposure
Decarbonization Targets Current exposure We have enhanced the materiality assessment with scenario analysis to calculate quantitative heatmaps December 2022: EUR Billions TR PR SCIB Other segments Power (Conventional) 27 2 of which, power generation clients with more than 10% of 4 0 revenues coming
Slide 46: Thank You.
Thank You. Our purpose is to help people and businesses prosper. Our culture is based on believing that everything we do should be: