# Sustainability ## Helping people and businesses prosper ### Q1’25 *** ## Important Information ### Non-IFRS and alternative performance measures Banco Santander, S.A. (“Santander”) cautions that this document may contain 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 the 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 accounting periods. Nonetheless, the APMs and non-IFRS measures are supplemental information; their purpose is not to substitute the 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 environmental, social and governance labels have not been calculated in accordance with the Taxonomy Regulation or with the indicators for principal adverse impact in SFDR. Banco Santander 2024 Annual Financial Report contains more details on APMs and non-IFRS measures. This document is available on Santander’s website (www.santander.com). ### Sustainability information This document may contain, in addition to financial information, sustainability-related information, including environmental, social and governance-related metrics, statements, goals, targets, commitments and opinions. Sustainability information is not audited nor, save as expressly indicated under section ‘Auditors’ reviews’ of the 2024 Annual Financial Report, reviewed by an external auditor. Sustainability information is prepared following various external and internal frameworks, reporting guidelines and measurement, collection and verification methods and practices, which may materially differ from those applicable to financial information and are in many cases emerging and evolving. Sustainability information is based on various materiality thresholds, estimates, assumptions, judgments and underlying data derived internally and from third parties. Sustainability information is thus subject to significant measurement uncertainties, may not be comparable to sustainability information of other companies or over time or across periods and its use 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. The sustainability information is for informational purposes only, 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 may contain 'forward-looking statements', as defined by the US 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', 'ambition', 'aspiration', 'commitment', 'commit', 'focus', 'pledge' and similar expressions. They include (but are not limited to) statements on future business development, shareholder remuneration policy and NFI. However, risks, uncertainties and other important factors may lead to developments and results that differ materially from those anticipated, expected, projected or assumed in forward-looking statements. The important factors below (and others mentioned in this document), 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: - general economic or industry conditions (e.g., an economic downturn; higher volatility in the capital markets; inflation; deflation; changes in demographics, consumer spending, investment or saving habits; and the effects of the wars in Ukraine and the Middle East or the outbreak of public health emergencies in the global economy) in areas where we have significant operations or investments; - climate-related conditions, regulations, targets and weather events; - exposure to market risks (e.g., risks from interest rates, foreign exchange rates, equity prices and new benchmark indices); - potential losses from early loan repayment, collateral depreciation or counterparty risk; - political instability in Spain, the UK, other European countries, Latin America and the US; - legislative, regulatory or tax changes (including regulatory capital and liquidity requirements), especially in view of the UK's exit from the European Union and greater regulation prompted by financial crises; - acquisition integration and challenges arising from deviating management’s resources and attention from other strategic opportunities and operational matters; - uncertainty over the scope of actions that may be required by us, governments and other 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; - our own decisions and actions, including those affecting or changing our practices, operations, priorities, strategies, policies or procedures; and - changes affecting our access to liquidity and funding on acceptable terms, especially due to credit spread shifts or credit rating downgrade for the entire group or core subsidiaries. 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, including, but not limited to developing standards that may change in the future; plans, projections, 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’ energy and climate strategies, and the underlying assumptions and estimated impacts on Santander’s and third-parties’ businesses related thereto; Santander’s and third-parties’ approach, plans and expectations in relation to carbon use and targeted reductions of emissions; changes in operations or investments under existing or future environmental laws and regulations; and changes in government regulations and regulatory requirements, including those related to climate-related initiatives. Forward-looking statements are aspirational, should be regarded as indicative, preliminary and for illustrative purposes only, speak only as of the date of this document and are informed by the knowledge, information and views available on such date and are subject to change without notice. Banco 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. ### 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 earnings (including earnings per share) will necessarily be the same or higher than in a previous period. Nothing mentioned in this document should be taken as a profit and loss forecast. ### Not a securities offer This document and the information it contains does not constitute an offer to sell nor the solicitation of an offer to buy any securities. ### Third Party Information In particular, regarding the data provided by third parties, neither Santander, nor any of its directors, managers or employees, either explicitly or implicitly, guarantees that these contents are exact, accurate, comprehensive or complete, nor are they obliged to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents in by any means, Santander may introduce any changes it deems suitable, and may omit, partially or completely, any of the elements of this document, and in case of any deviation, Santander assumes no liability for any discrepancy. *** ## Index 01 Sustainability at Santander 02 Climate Transition plan 03 Financing the green transition 04 Financial Inclusion, Empowerment & Community support 05 Corporate Governance 06 External engagement & Recognition *** ## 01 Sustainability at strategy *** ## Sustainability | Our strategy - Help our customers in meeting their goals in their transition to a low-carbon economy while also managing climate-related risks and impacts. - Help our employees develop by promoting an inclusive culture and learning and providing fair working conditions. - Contribute to the economic, financial and social development of our communities, with a special focus on Education, Employability and Entrepreneurship. - Be a trusted partner to our customers, with products and services that adapt to their needs, while applying responsible practices, supporting their financial inclusion, and protecting their information. - Act responsibly through a strong culture, governance and conduct. *** ## Sustainability | Strategy Our Sustainability strategy continues to focus on issues that are material to Santander. - **Think Value**: Profitable growth makes us resilient and able to withstand shocks, invest in our employees and customer value proposition, support our communities, and create value for our shareholders. - **Think Customer**: Be the partner of choice for our customers by offering the best products and helping them in their transition to a low-carbon economy and support their financial inclusion and financial health (including financial education). - **Think Global**: Use our scale and local leadership to tackle global sustainability challenges. The Group’s sustainability strategy embeds three action lines: Think Value, Think Customer and Think Global to drive business growth and become more resilient to increasing environmental, governance and social risks. *** ## ESG strategy | Our journey Our journey over the past years highlights our ongoing commitment to fight climate change and contribute to a more sustainable future. ```mermaid timeline title ESG strategy timeline 2009 : Signed the Equator Principles : Approved 1st sectorial policies 2011 : Started managing our environmental footprint 2017 : TCFD Endorsement 2018 : 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 2019 : 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 2020 : Pledged to reduce our carbon footprint focusing on the most material sectors to climate risk : Creation of a dedicated ESG within Investor relations 2021 : Set an ambition to be net-zero by 2050 and became Founding Member of the Net-zero Banking Alliance : Cut unnecessary single-use plastics 2022 : Creation of a Global Green Finance Team and Risk team reporting directly to the CRO : Development of first Sustainable Finance Classification System, including transition finance criteria : Alignment targets disclosed for oil & gas, steel and aviation 2024 : Alignment targets disclosed for automotive sectors (manufacturing and lending) : Financed emissions disclosed for residential Mortgages (UK) and Agriculture (Brazil) : We achieved our 2025 target to raise or facilitate EUR 120 billion in green finance 18 months early ``` *** ## Climate transition plan | Our objectives We have set targets in those areas where we have the greatest potential impact. | Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Q1'25 | 2025/2030 target | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Green finance raised and facilitated (€bn)$^A$ | 19 | 33.8 | 65.7 | 94.5 | 115.3 | 139.4 | 144.9 | 120bn by 2025; 220bn by 2030 | | AuMs in Socially Responsible Investments (SRI) (€bn) | - | - | 27.1 | 53.2 | 67.7 | 88.8 | 107.9 | 100bn by 2025 | | Thermal coal related power & mining phase out (€bn) | - | - | 7.0 | 5.9 | 4.9 | 4.8 | - | 0 by 2030 | | Emission intensity of power generation portfolio$^B$ | 0.21 | 0.17 | 0.19 | 0.16 | 0.15 | - | - | 0.11 tCO$_2$e / MWh in 2030 | | Absolute emissions of energy (oil & gas) portfolio$^B$ | 23.84 | 22.58 | 27.43 | 20.94 | 20.27 | - | - | 16.98 mtCO$_2$e in 2030 | | Emissions intensity of aviation portfolio$^B$ | 92.47 | 93.05 | 97.21 | 81.09 | 82.99 | - | - | 61.71 gCO$_2$e / RPK in 2030 | | Emissions intensity of steel portfolio$^B$ | 1.58 | 1.40 | 1.36 | 1.24 | 1.38 | - | - | 1.07 tCO$_2$e / tS in 2030 | | Emissions intensity of auto manufacturing portfolio$^B$ | - | 149 | 138 | 133 | 134 | - | - | 103 gCO$_2$ / vkm in 2030 | | Emissions intensity of auto lending portfolio$^{B,C}$ | - | - | - | 137 | 133 | - | - | 75-89 gCO$_2$e / vkm in 2030 | | Electricity from renewable sources$^D$ | 50% | 57% | 75% | 88% | 97% | 96% | 97% | 100% by 2025 | $^A$ Includes Grupo Santander's contribution to green finance: project finance; green bonds; export finance and advisory services to help customers transition to a low-carbon economy. $^B$ The figures displayed are the latest available given limited data availability from customers to assess financed emissions. We used Banco Santander's internal calculation methodology, which is based on the Partnership for Carbon Accounting Financials (PCAF). $^C$ Consumer lending for the purchase of passenger cars in Europe. $^D$ In countries where we can verify electricity from renewable sources at Banco Santander properties. It considers the 10 core markets where we operate. *** ## 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" **Ana Botín, Executive Chairman** "Sustainability and inclusion are at the core of our vision. We are empowering communities, financing the transition to a greener economy, and fostering a culture of responsibility, ensuring that our impact extends beyond profits to create a better world." **Héctor Grisi Checa, CEO** "Santander has been supporting the transition to a low carbon economy and financing the build-out of renewable energy capacity for decades. In 2024, we hit the target we set in 2019 to mobilize more than €120 billion in green finance 18 months early. We have mobilized almost €140 billion since 2019." *** ## 02 Alignment targets *** ## Alignment pathway | Key milestones We continue to work towards our ambition of net zero carbon emissions by 2050 by progressively setting specific actions to align our portfolios. - **2021**: Net zero ambition and first alignment targets (thermal coal, power generation and Santander Asset Management- SAM); Cut unnecessary single-use plastics. - **2022-2024**: Alignment targets disclosed for oil & gas, steel and aviation; Developed and evolved a Sustainable Finance & Investment Classification System; Alignment targets disclosed for automotive sectors (manufacturing & lending); Financed emissions disclosed for residential Mortgages (UK) and Agriculture (Brazil); In 2024 we achieved our 2025 target to raise or facilitate €120bn in green finance 18 months early. - **2025**: Financed emissions disclosed for residential mortgages (Spain) and commercial real estate (Spain and UK); Use 100% of energy from renewable sources in all Santander buildings$^1$; €100bn in Socially Responsible Investments$^2$. - **2030**: SAM target to halve net emissions for 50% of in scope AuM$^2$; Alignment targets for power generation, oil & gas, steel, aviation, auto manufacturing and auto lending; Thermal coal-related power & mining phase out; Raise or facilitate €220 billion in green finance from 2019. $^1$ In countries where we can verify electricity from renewable sources at Banco Santander properties. Target considers the 10 core markets in which we operate. $^2$ Assets in scope are 54% of SAM’s total assets, which currently have a set Net Zero methodology. This objective might be revised upwards at least every five years, depending on data availability. *** ## Alignment pathway | Progress in our alignment targets | Sector | Metric | Baseline | 2020 | 2021 | 2022 | 2023 | 2030 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Power generation | tCO$_2$e/MWh | 0.21* (2019) | 0.17 | 0.19 | 0.16 | 0.15 | 0.11 (-46%) | | Energy (Oil & Gas) | mtCO$_2$e | 23.84 (2019) | 22.58 | 27.43 | 20.94 | 20.27 | 16.98 (-29%) | | Aviation | grCO$_2$e/RPK | 92.47 (2019) | 93.05 | 97.21 | 81.09 | 82.99 | 61.71 (-33%) | | Steel | tCO$_2$e/tS | 1.58 (2019) | 1.40 | 1.36 | 1.24 | 1.38 | 1.07 (-32%) | | Auto manufacturing | gCO$_2$/vkm | 149 (2020) | 149 | 138 | 133 | 134 | 103 (-31%) | | Auto lending$^A$ | gCO$_2$e/vkm | 137 (2020) | N/A | N/A | 137 | 133 | 75-89 (-35-45%) | *Phase-out targets to eliminate exposure by 2030 to power generation customers with a revenue dependency on coal of over 10% and thermal coal mining.* $^A$ In Consumer lending for the purchase of passenger cars in Europe. *** ## Alignment pathway | Mitigating levers - **Policy**: 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$^1$. - **Risk Appetite**: We set risk appetite limits on sectors with decarbonization targets, tiering customers according to the degree of alignment with our ambition and the quality of their transition plans. - **ESG Panels**: Several panels of ESG experts were put in place during 2023 to analyse and challenge the proposed classification under sustainability criteria, fully aligned with the SFICS (Sustainable Finance and Investment Classification System). ### Further Actions - Credit committees, embed environmental, social and climate change factors in transaction review. - CIB customer ratings consider environmental, social and climate change qualitative assessments for climate sectors. - Customer engagement in the most relevant sectors, helping clients in their transition, with tailormade solutions. - Multi-disciplinary working group on ESG controversies, coordinated by the Reputational risk function. $^1$ In Oil and Gas, Power Generation and transmission, Mining and Metals, and Soft Commodities. *** ## Sustainability ambition | Examples of some efforts across our Global Businesses ### Wealth Management road to net-zero - **01 Climate Commitments**: In March 2021, Santander AM joined the global net-zero Asset Managers (NZAM) initiative for net-zero greenhouse gas emissions by 2050. 2030 interim target to reduce net emissions by half for 50% of AUM in-scope$^1$. - **02 EUR 100 bn in Socially responsible investments AUMs by 2025$^2$**: Increase through fund reprofiling and new sustainable investment products and services. Creation of a global ESG strategy team to coordinate the efforts of our three businesses and strengthen SAM's ESG dedicated team. **Net-zero Actions**: - Participation in key investors climate initiatives. - Collaboration as a tool for driving change. - Engagement plan in our core markets with a focus on SME’s. - Polluting Sectors strategy, phasing-out coal exposure and focusing on key material sectors. - Portfolio construction evolution, towards net-zero. - Facilitation of investment in climate solutions. - Maintain leadership in climate stewardship and advocacy in core markets. ### Corporate and Investment Banking - **01 Supporting customers in their transition goals**: To achieve our net-zero ambition, our main lever as a bank is supporting our customers in their efforts to transition to a low carbon economy. - **02 Sustainable Finance proposition**: CIB has raised and mobilized globally €139.4 billion in green finance between 2019 and December 2024. We have achieved our €120bn target 18 months ahead of time and are working towards reaching €220bn by 2030. **Deals (Non-exhaustive list)**: - Santander acted as a Financial Adviser to Sonnedix to raise a €2.5bn debt package to refinance 1.1GW portfolio of renewable energy assets in Spain, Italy, and France. - In Export Finance, Santander participated as a Pathfinder, MLA and Lender in €1.3bn green financing partially covered by BPI Assurance Export for Verkor. - In Trade Finance, we participated in a €1.2bn green guarantee line with coverage from Spanish export credit agency Cesce for Siemens Gamesa. - In Supply Chain Finance, we signed a sustainability-linked confirming program with Vestas in Brazil, the first supply chain finance program of its kind for the energy sector in the country. *** ## 03 Financing the green transition *** ## 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 on: - Raising and mobilizing €220 bn in green finance by 2030. - Developing a green value proposition and ESG investment solutions for our clients. - Green bonds: three issuances of EUR 3bn since 2019. - Engaging in global initiatives like the Net-zero Banking Alliance where we are a founding member. *** ## Green Finance | Our global franchise Santander has been a leader in renewable energy finance for more than 10. In 2024, we were among the top banks in number of transactions and deal value globally, with 82 transactions closed and a 4.54% market share. | Rank | Loan Provider | Vol. (€mn) | Nº | Rank | | :--- | :--- | :--- | :--- | :--- | | 1 | Bank 1 | 8,009 | 79 | 4.95% | | 2 | Santander | 7,346 | 82 | 4.54% | | 3 | Bank 2 | 7,175 | 94 | 4.44% | | 4 | Peer 1 | 5,641 | 80 | 3.49% | | 5 | Bank 3 | 4,930 | 66 | 3.05% | | 6 | Peer 2 | 4,126 | 59 | 2.55% | | 7 | Peer 3 | 4,044 | 49 | 2.50% | | 8 | Bank 4 | 3,978 | 41 | 2.46% | | 9 | Bank 5 | 3,538 | 44 | 2.19% | | 10 | Bank 6 | 3,411 | 46 | 2.11% | *** ## Green Finance | Green solutions for our individual, SMEs and Corporate customers | Verticals | What we finance | Value proposition 2024 | | :--- | :--- | :--- | | **Real Estate** | Purchase, construction and renovation of energy-efficient buildings. Installation of renewable energy systems. | Developer loans, CRE, Green mortgages. Consumer loans for renovation, solar panel, EV charging stations in buildings, energy efficiency equipment. | | **Mobility** | Clean transport across land, water, air, and infrastructure. | Leases and financing of electric and hybrid vehicles, EV charging stations, clean buses and trucks, rail transport, logistics, passenger vessels, port and airport infrastructure, and bicycle lanes. | | **Renewables** | Clean Energy from renewables and low-carbon fuels (hydrogen, biogas, biofuels). Heat pumps, cogeneration systems and energy storage solutions. | Corporate loans and leasing for renewable energy assets/projects, low-carbon technologies, and energy efficiency solutions. | | **Agriculture** | Sustainable and protected agriculture. Land and forest conservation. Regenerative, low-emission farming and infrastructure. | Financing of sustainable agriculture practices such as efficient irrigation, low-emission machinery and reduced fertilizer use. | | **Waste & Water Management** | Activities to adapt to or mitigate climate change, preserve biodiversity, and promote circular economy, waste and water management. | Financing of water, waste and soil treatment, energy efficiency updates, emissions reduction, and conservation. | | **Circular economy** | - | - | *** ## Green Finance | Examples of some Country and Unit efforts ### Santander Consumer Finance Green proposition - +243.000 Electric vehicles financed: €6.8bn$^1$. - Market share in Europe over 12% in EU SCF markets. - Subscription Services. - New agreements with OEM specialists. - New finance product catalogue for EVs. - **Consumer (non-auto) business**: Solar Panels, Green heating systems, Chargers, Bikes & e-bikes, Eco cards, Retrofit. ### Santander España Sustainable product proposition - **Financial offer (Corporates & individuals)**: Green Loans for dedicated purposes across 5 verticals, Sustainability Linked Loans, Green mortgages, Green consumer loans for retrofitting works or energy efficiency, green vehicles…, ECO Renting / leasing mobility, Loans for the installation of solar panels. - **Non-financial offer**: Carbon footprint calculation and compensation for individual customers, Sustainable value proposal for Cards (Digital First, recycled materials), Homes value proposition (green mortgages, retrofitting works), Agreement with CBRE to decarbonize real estate assets, Platform to help companies manage and benefit from public aid and the NextGen EU funds, Other services (Non-financial reports assistance). *** ## Green Finance | Protecting the Brazilian Amazon Santander is committed to safeguarding and promoting the sustainable development of the Amazon rainforest, which is vital to address climate change and conserve biodiversity. We need economic growth, but it must be sustainable. Santander Brazil has an E&S (Environmental and Social) risk department in São Paulo, staffed by expert analysts. **Actions taken**: - **Regular reviews of customer's practices**: We conduct annual ESG reviews of more than 2,000 corporate and retail customers, including beef processors, soy traders and logging companies. - **Safeguards relating to indigenous and conservation areas**: We screen loan applications to make sure that properties do not overlap with officially recognized indigenous territories, conservation units and forests classified by the government as Type B$^1$. - **Comprehensive loan screening**: All loan requests by farmers and ranchers to Santander in Brazil are checked for government embargoes due to illegal deforestation. - **Since Q1’22**: We have been running daily checks to identify potential recent deforestation on farms and ranches that we finance throughout the entire loan term, even before any government fines are imposed. *** ## 04 Financial Inclusion & Community support *** ## Financial Inclusion & 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. - **4.8mn**: People financially included$^1$. - **€1.27bn**: Disbursed in microcredits to more than 1.3mn of microentrepreneurs. - **€166mn**: Invested in communities. - **€104mn**: To promote higher education, employability and entrepreneurship, benefitting 5 million people. *** ## Financial Inclusion & Community support ### Access - **Promoting access to cash and transactions**: Branches in underbanked and remote regions, Partnerships to reach underserved communities. - **Promoting digital access**: Digital wallets and points of sale, Basic accounts. - **Financial solutions for vulnerable groups**: Support to senior citizen customers. ### Finance - **Microfinance**: Microfinance programs to promote social mobility and help low-income and underbanked entrepreneurs set up and grow businesses. - **Supporting customers in financial distress**: Debt relief programs that include payment deferrals and line of credit extensions. - **Financing low-income households' basic needs**: Affordable housing supply, Credit support for low-income households/people with difficulty getting credit. *** ## Financial Inclusion & Community support We support the communities where we operate by helping them address their social needs through contribution to education, employability and entrepreneurship. **Main lines of action**: - **1. Education (Santander Scholarships)**: 1,181 Agreements signed with universities, institutions and organizations in 14 countries$^A$; 654 Scholarships and courses for students with disabilities and other vulnerable groups. - **2. Entrepreneurship (Santander X program)**: A global initiative that provides access to training, advice and resources needed to launch, scale up and transform a business; help entrepreneurs showcase projects through Santander X 100. - **3. Employability (Universia portal)**: The platform through which Santander guides and posts job offers for young graduates and students, using AI to help them draw up professional profiles. *** ## 05 Corporate Governance *** ## Corporate Governance | Our strengths As a responsible bank we have a clear, robust governance. Best practices on governance are channelled to all our subsidiaries. - **Effective engagement with our shareholders**: High participation in General Shareholders’ meetings (68.5% in 2025). Commitment to maximise disclosure and quality of information. - **Effective board of directors**: Majority of independent directors, balanced and diverse composition, separate Chairman and CEO roles. - **Focus on responsible business practices**: Publicly communicated responsible banking targets (climate change). Thematic responsible banking, sustainability and culture committee. *** ## 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: - Respect for shareholders’ rights. - A balanced Board composition. - Maximum transparency regarding remuneration. - Be at the forefront of best practices and long-term vision. - Embedding ESG in our decision-making processes. *** ## Corporate Governance | Board composition - **Number of Directors**: 15 (appointed for a 3-year term). - **Geographical diversity**: 5 Nationalities (Europe, US, UK, LATAM and Other). - **Independent Board members**: 66.6% (4.76 average years on board). - **Women part of the Board**: 40% (Achievement of our female representation target of 40-60%). *** ## Corporate Governance | Executive variable remuneration Executive directors' variable remuneration is subject to meeting financial and non-financial targets. - **A. Aligned with our strategic goals**: Includes priorities from 2023 Investor Day, focus on clients, RoTE, and capital generation. Long-term targets include RoTE, rTSR, and ESG metrics. - **B. Alignment with shareholder interests**: 50% of variable remuneration in instruments (shares/RSUs); Share retention policy (3 years); 60% of variable remuneration is deferred over 5 years. - **C. Alignment with regulatory requirements**: Includes malus and clawback policy. *** ## Corporate Governance | ESG in Reward **LTI (Long Term Incentives) Weights**: - RoTE: 30% - rTSR: 50% - ESG: 20% **Equally weighted ESG action lines (2025-2027)**: - Women in senior positions - Financial inclusion - Socially Responsible Investments - Climate - Business raised and facilitated **Short term Scorecard 2024**: - Transformation (45%): Active customers growth (10%), Customer per active customer (15%), Fees over costs (20%). - Capital (25%): Capital generation (25%). - Sustainable Profitability (30%): RoRWA SVA (30%). - **Qualitative assessment weights**: Performance vs. Market (±10%), Compliance and Risk (±10%), Network Collaboration (±10%), Sustainability targets (±5%). *** ## 06 External engagement & Recognition *** ## External engagement & Recognition | Partnerships & initiatives Main sustainability initiatives where Santander is a member or participant: - **United Nations Global Compact**: Network member since 2022; gender equality program since 2020. - **UNEP Finance initiative**: Member since 1992; founding member of the Principles for Responsible Banking. - **World Business Council for Sustainable Development (WBCSD)**: Member since 2015. - **Equator Principles**: Signatory since 2009. - **International Capital Markets Association (ICMA)**: Member since 2014. - **International Sustainability Standards Board (ISSB)**: Joined IFRS Corporate Champions initiative in 2024. - **Task Force on Climate-Related Financial Disclosures (TCFD)**: Supporting since 2017. - **Institute of International Finance (IIF)**: Executive Chair is current IIF Chair. - **European Banking Federation (EBF)**: Member of several working groups. - **Association for Financial Markets in Europe (AFME)**: Part of AFME's Sustainable Finance SteerCo. *** ## External engagement & Recognition | ESG Ratings We engage with ESG ratings to signal our progress and keep improving with their feedback. | Rating Agency | 2023 | 2024 | Evolution | | :--- | :--- | :--- | :--- | | **MSCI** | MSCI index AA | MSCI index AA | = | | **Sustainalytics** | Low-risk 19.7 | Low-risk 17.1 | ▲ | | **CDP** | Leadership A- | Leadership A | ▲ | | **ISS ESG** | C- 55.6 | C+ 58.5 | ▲ | *** ## Appendix *** ## ESG in Investor Relations | Main contact details - **Investor Relations**: investor@gruposantander.com - **Tosin Iduh (ESG & Market Intelligence)**: oiduhija@gruposantander.com *** ## Transparency & Disclosure | Reports and additional information Please click on the below images to consult public details highlighted in this presentation: - **2024 Annual report** - **Corporate Governance presentation** - [www.santander.com](http://www.santander.com) *** ## Decarbonization Targets | Current exposure We have enhanced the materiality assessment with scenario analysis to calculate quantitative heatmaps. | September 2024 (pre-mitigation), EUR billion | TR | PR | CIB | Other segments | | :--- | :--- | :--- | :--- | :--- | | Power (Conventional) | - | - | 26 | 2 | | Power (Renewables Project Finance) | - | - | 13 | 0 | | Oil & Gas | - | - | 20 | 1 | | Mining & Metals | - | - | 13 | 7 | | Transport | - | - | 29 | 12 | | Auto Consumer | - | - | 0 | 162 | | Real Estate | - | - | 7 | 386 | | Other Climate-related sectors | - | - | - | - | | - Agriculture | - | - | 3 | 9 | | - Construction | - | - | 18 | 15 | | - Manufacturing | - | - | 44 | 25 | | - Water & Waste | - | - | 3 | 1 | | **Climate Sectors** | - | - | 175 | 621 | | **Other sectors** | - | - | 65 | 212 | | **Total portfolio** | - | - | 241 | 833 | *We continue to work on enhancing climate information, methodologies and use cases. Our portfolios continue to show less vulnerability to physical risk, given the concentration in low-risk locations.* *** ## Thank You. Our purpose is to help people and businesses prosper. Our culture is based on believing that everything we do should be: Simple Personal Fair