Q4'23
ESG
Towards a more sustainable world
1
Important Information
Non-IFRS and alternative performance measures
This document contains financial information prepared according to International Financial Reporting Standards (IFRS) and taken from our consolidated financial statements, as well as alternative performance measures (APMs) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015, and other non-IFRS measures. The APMs and non-IFRS measures were calculated with information from Grupo Santander; however, they are neither defined or detailed in the applicable financial reporting framework nor audited or reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider them to be useful metrics for our management and investors to compare operating performance between periods. APMs we use are presented unless otherwise specified on a constant FX basis, which is computed by adjusting comparative period reported data for the effects of foreign currency translation differences, which distort period-on-period comparisons. Nonetheless, the APMs and non-IFRS measures are supplemental information; their purpose is not to substitute IFRS measures. Furthermore, companies in our industry and others may calculate or use APMs and non-IFRS measures differently, thus making them less useful for comparison purposes. APMs using ESG labels have not been calculated in accordance with the Taxonomy Regulation or with the indicators for principal adverse impact in SFDR. For further details on APMs and Non-IFRS Measures, including their definition or a reconciliation between any applicable management indicators and the financial data presented in the consolidated financial statements prepared under IFRS, please see the 2022 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the SEC) on 1 March 2023 (https://www.santander.com/content/dam/santander-com/en/documentos/informacion-sobre-resultados-semestrales-y-anuales-suministrada-a-la-sec/2023/sec-2022-annual-20-f-2022-en.pdf), as well as the section "Alternative performance measures" of the Banco Santander, S.A. (Santander) Q4 2023 Financial Report, published on 31 January 2024 (https://www.santander.com/en/shareholders- and-investors/financial-and-economic-information#quarterly-results). Underlying measures, which are included in this document, are non- IFRS measures.
The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the businesses included and local applicable accounting principles of our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries.
Non-financial information
This document contains, in addition to financial information, non-financial information (NFI), including environmental, social and governance- related metrics, statements, goals, commitments and opinions.
NFI is included to comply with Spanish Act 11/2018 on non-financial information and diversity and to provide a broader view of our impact. NFI is not audited nor reviewed by an external auditor. NFI is prepared following various external and internal frameworks, reporting guidelines and measurement, collection and verification methods and practices, which are materially different from those applicable to financial information and are in many cases emerging and evolving. NFI is based on various materiality thresholds, estimates, assumptions, judgments and underlying data derived internally and from third parties. NFI is thus subject to significant measurement uncertainties, may not be comparable to NFI of other companies or over time or across periods and its inclusion is not meant to imply that the information is fit for any particular purpose or that it is material to us under mandatory reporting standards. NFI is for informational purposes only and without any liability being accepted in connection with it except where such liability cannot be limited under overriding provisions of applicable law.
Forward-looking statements
Santander hereby warns that this document contains "forward-looking statements" as per the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements can be understood through words and expressions like "expect", "project", "anticipate", "should", "intend", "probability", "risk", "VaR", "RoRAC", "RoRWA", "TNAV", "target", "goal", "objective", "estimate", "future", "commitment", "commit", "focus", "pledge" and similar expressions. They include (but are not limited to) statements on future business development, shareholder remuneration policy and NFI.
While these forward-looking statements represent our judgement and future expectations concerning our business developments and results may differ materially from those anticipated, expected, projected or assumed in forward-looking statements.
In particular, forward looking statements are based on current expectations and future estimates about Santander's and third-parties' operations and businesses and address matters that are uncertain to varying degrees and may change, including, but not limited to (a) expectations, targets, objectives, strategies and goals relating to environmental, social, safety and governance performance, including expectations regarding future execution of Santander's and third-parties' (including governments and other public actors) energy and climate strategies, and the underlying assumptions and estimated impacts on Santander's and third-parties' businesses related thereto; (b) Santander's and third-parties' approach, plans and expectations in relation to carbon use and targeted reductions of emissions, which may be affected by conflicting interests such as energy security; (c) changes in operations or investments under existing or future environmental laws and regulations; (d) changes in rules and regulations, regulatory requirements and internal policies, including those related to climate-related initiatives; (e) our own decisions and actions including those affecting or changing our practices, operations, priorities, strategies, policies or procedures; and (f) the uncertainty over the scope of actions that may be required by us, governments and others to achieve goals relating to climate, environmental and social matters, as well as the evolving nature of underlying science and industry and governmental standards and regulations.
In addition, the important factors described in this document and other risk factors, uncertainties or contingencies detailed in our most recent Form 20-F and subsequent 6-Ks filed with, or furnished to, the SEC, as well as other unknown or unpredictable factors, could affect our future development and results and could lead to outcomes materially different from what our forward-looking statements anticipate, expect, project or assume.
Forward-looking statements are therefore aspirational, should be regarded as indicative, preliminary and for illustrative purposes only, speak only as of the date of this document, are informed by the knowledge, information and views available on such date and are subject to change without notice. Santander is not required to update or revise any forward-looking statements, regardless of new information, future events or otherwise, except as required by applicable law. Santander does not accept any liability in connection with forward-looking statements except where such liability cannot be limited under overriding provisions of applicable law.
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Past performance does not indicate future outcomes
Statements about historical performance or growth rates must not be construed as suggesting that future performance, share price or results (including earnings per share) will necessarily be the same or higher than in a previous period. Nothing in this document should be taken as a profit and loss forecast.
Third Party Information
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Index
01 | 02 | 03 | 04 | 05 | 06 |
ESGDecarbonization
strategyambition
Financing the | Financial | Corporate | External |
green transition | Inclusion, | Governance | engagement |
Empowerment | & Recognition | ||
& Community | |||
support |
3
01
ESG strategy
ESG strategy | Our approach
What makes us different
Financial Inclusion | Green Finance |
Awarded Best Bank for Financial | #1 worldwide Bank in the |
Inclusion in 2023 by Euromoney | financing Renewable Energy¹ |
Decarbonization | Governance |
Net-zero decarbonization | Best practices and robust |
targets as founding members | board composition |
of the NZBA |
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. | 5 |
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
Our vision | Our strategy | Our actions |
is to play a major role in the | focuses on delivering our Net | materialize the Group's ESG strategy, |
transition to a low carbon economy, | zero ambition by 2050, while | as we continue progressing and |
supporting inclusive & sustainable | we continue helping customers | delivering on our responsible |
growth and taking into account | transition to a low carbon economy, | banking commitments, to help |
social and environmental risks & | develop best in class sustainable | tackle global challenges |
opportunities | propositions, and do things in a | |
simple, personal and fair way |
Founding
Member 2021
Best bank for
Financial
Inclusion 2022
Principles for Responsible Banking, Founding Member 2019
Signing member 2009
Good Corporate
Governance
Certificate 2021
6
ESG strategy
Overarching goal: Focus on most material items
Ambition
Support the transition to a low carbon economy
Promote inclusive growth
Strong governance and culture across the organization
Goals
Deliver our Net zero ambition by 2050
Support productive inclusion across our main stakeholders: employees, customers and communities
Incorporate ESG in behaviors, policies, processes and governance throughout the Group
Priority action plans | SDG's |
Set targets in our portfolios to align with pathways to net zero, while taking into consideration other environmental goals as Nature
Support customers in their transition, engaging with them and developing a best-in-class sustainable finance and investment proposition
Diverse and inclusive workplace that fosters employee wellbeing
Support financial inclusion of the most vulnerable customers, promoting access to banking products and services and offering financial education
Community support, with focus on Education, Employability and Entrepreneurship
Consistent tone from the top to drive cultural change and deliver on our commitments (climate, diversity, training…)
Integrate ESG into strategic processes, Risk Management & rest of relevant functions and build capabilities
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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
TCFD | ||||
Started | ||||
Endorsement | ||||
Signed the | ||||
managing our | ||||
Equator | environmental | |||
Principles | footprint | |||
Approved | ||||
1st sectorial | ||||
2017 | ||||
policies | ||||
2011 | ||||
2009 | ||||
Top Risk exercise began covering Climate Risk
Creation of
The Responsible Banking Board Committee & Responsible Banking corporate team & network
Creation of
ESG Wealth
Management team, ESG Risk team
2018
Responsible Banking Commitments under each sustainability theme
Joined UN
Collective Commitment to Climate Action
Global Sustainable Bonds Framework creation
Founding members of the Principles for Responsible Banking
SCIB global ESG Solutions team creation
2019
Became carbon neutral in our own operations
Pledged to reduce our carbon footprint focusing on the most material sectors to climate risk
Creation of a dedicated ESG within Investor relations
2020
Set an ambition to be net zero by 2050 and became Founding Member of the Net Zero Banking Alliance
Development of internal Taxonomy - Sustainable Finance Classification System (SFCS)
Creation of an ESG dedicated Investor Relations team
2021
Creation of a Global Green Finance Team and Risk team reporting directly to the CRO
Publication of our Green, Social and Sustainability Funding Global Framework
We continued to embed climate management in business as usual across SCIB units and Risks
2022
8
ESG strategy | Responsible Banking ambition | From…to… | Accumulated | Target achieved |
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.
NEW IN 2023
Electricity from renewable sources
Carbon neutral in our own operations
Green finance raised and facilitated (€bn)
AuMs in Socially Responsible Investments (SRI) (€bn)
Thermal coal related power & mining phase out (€bn)
Emission intensity of power generation portfolio Absolute emissions of energy (oil & gas) portfolio Emissions intensity of aviation portfolio Emissions intensity of steel portfolio
Emissions intensity of auto manufacturing portfolio Emissions intensity of auto lending portfolio
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2025/2030 target |
43% | 50% | 57% | 75% | 88% | 97% | 100% by 2025 |
Every year | |||||
19 | 33.8 | 65.7 | 94.5 | 114.6 | 120bn by 2025 |
220bn by 2030 | |||||
27.1 | 53.2 | 67.7 | 100 bn by 2025 |
7 | 5.9 | 4.9 | 0 by 2030 | ||||||||||||
0.21 | 0.17 | 0.19 | 0.11 tCO2e / MWh in 2030 | ||||||||||||
23.84 | 22.58 | 27.43 | 16.98 mtCO2e in 2030 | ||||||||||||
92.47 | |||||||||||||||
93.05 | 97.21 | 61.71 gCO² e / RPK in 2030 | |||||||||||||
1.58 | 1.40 | 1.36 | 1.07 tCO 2 e / ts in 2030 | ||||||||||||
149 | 138 | 103 gCO2/vkm in 2030 | |||||||||||||
137 | 75-89 gCO2e/vkm in 2030 | ||||||||||||||
Commitment achieved | |||||||||||||||
Cumulative target | |||||||||||||||
1. We increased the target at the Investor Day: additional 5mn people with financial inclusion proposals (access and finance, not including financial education). | 9 |
ESG strategy | Our achievements
We want to make a positive impact with actions that reflect our sustainability strategy and commitment
1,8 mn
Financial inclusion (#People)1
#1 bank worldwide
by number of deals in renewable project finance2
€114,6 bn
of Green Finance mobilized since 2019
3 Green bonds
issued since 2019 for an amount of EUR 1 bn each
>€1.1bn mn
Raised to support microentrepreneurs in 2023
97%
of electricity used from renewable resources already
€6.4 bn
in the financing of electric vehicles under our consumer businesses
66,6%
of independent directors and 40% of women representation at Board level
Note: Latest data available for FY2022
1. Starting Jan-23. Does not include financial education10
2. Renewable energy finance ranking based on the league tables provided by Infralogic as of January 2023 for the last 10 years as of FY2022.
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Banco Santander SA published this content on 15 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 14:28:09 UTC.