# Banco Santander Green Bond report 2020

Banco Santander S.A.

Updated version of the Green Bond Report 2020 as of 31st of March 2022, which replaces and supersedes the earlier version of this document which was previously published on Santander’s website.

# Table of contents

1. Introduction 3
2. Overview of Banco Santander´s global sustainable bonds framework 6
3. Calculation methodology 7
4. Key figures 9
5. Green bond allocation & impact report 10
6. Disclaimer 16
7. Annex 18
 I. IEA emission factors 18
 II. PWC Independent Limited Assurance Report 18

# 1. Introduction

Climate change is a global challenge that requires everyone’s commitment and engagement. At Santander, we want to play our part in supporting our customers and the economy on our journey to become net zero carbon by 2050 for a greener, more sustainable world. This ambition applies to the Group’s operations (which have been carbon neutral since 2020) and emissions from our lending, advisory and investment services and our four-pronged climate strategy is based on:

```mermaid
graph LR
A[Aligning our portfolio to meet the Paris Agreement goals]
B[Supporting our customers in the green transition]
C[Reducing our environmental impact]
D[Embedding climate in risk management]
```

At Santander, we've always been aware of our responsibility towards society. By delivering on our purpose to help people and businesses prosper, we address key global challenges while growing as a business. Our culture, The Santander Way, aligns with our corporate strategy and includes our purpose and ways of working. It's the cornerstone of our bank; a responsible bank.

We focus on the areas where our operations can have the greatest impact. We embed environmental, social and governance criteria into our decision-making and commit to promoting inclusive and sustainable growth.

Our operations and investments contribute to several of the United Nations’ Sustainable Development Goals (SDGs) and to the objectives of the Paris Agreement on Climate Change. The three main SDGs we have the greatest impact on, as well as another eight that our operations also have a bearing on, are:

**The SDGs on which Banco Santander has the greatest impact**
* 8 Decent work and economic growth
* 13 Climate action
* 16 Peace, justice and strong institutions

**Other SDGs on which Banco Santander also has an impact**
* 1 No poverty
* 4 Quality education
* 5 Gender equality
* 7 Affordable and clean energy
* 10 Reduced inequalities
* 11 Sustainable cities and communities
* 12 Responsible consumption and production
* 17 Partnerships for the goals

# Financing the green transition

We are fully committed to promoting a low-carbon economy: we are founder member of the UN Principles for Responsible Banking and the Collective Commitment to Climate Action; a founder of the Net-Zero Banking Alliance (NZBA); and joined the Net Zero Asset Managers initiative. Additionally to our NetZero 2050 commitment, we’re one of the world’s largest green finance providers and will continue to bolster our commitment to the transition towards a more sustainable economy. As a tangible way of supporting our strategy and meeting new green investment targets, we developed the Santander Global Sustainable Bond Framework and issued our first green bond. To kick off our global sustainable issuance plan, in October 2019 we issued a €1 billion, seven-year green bond to fund wind and solar power projects. The following year, we issued another green bond and a green note for €1 billion and €1 million, respectively.

```mermaid
graph TD
A[Raise or facilitate the mobilization of 120 billion euros in green finance by 2025 and 220 billion euros by 2030]
B[Maintain our leadership position in renewables, as well as leveraging our origination capabilities to issue more green bonds]
C[Continue to develop our green product proposition]
D[Santander AM has joined the global Net Zero Asset Managers initiative]

A --> A1[As of June 2021, Santander CIB had contributed 41.7 billion euros. Moreover, Santander’s Retail and Commercial divisions are also raising green financing.]
B --> B1[Santander is a leading bank in financing renewable energies, ranking consistently in the Top 3 by number of deals and Top 5 by transaction value globally]
B --> B2[In 2020, we invested over 6 billion dollars in 143 renewable energy finance deals.]
C --> C1[Focus on green mortgages; energy efficiency loans; loans to install solar panels, for electric vehicles, and for low-carbon agriculture; ESG investment solutions incentivizing our clients to improve their ESG performance through Sustainability linked Loans (SLLs); and additional services such as eco-cards and carbon footprint measurement tools, which enable customers to offset emissions.]
D --> D1[Santander AM will halve the net emissions of 50% of its portfolio across the entire range of assets in which it has set targets to align with Net Zero Asset Managers, the global initiative that it joined in March, becoming the first Spanish asset manager to do so.]
D --> D2[As part of commitment, SAN will measure portfolio greenhouse emissions, create climate-related investment products, define climate stewardship & disclose its progress towards the Net Zero pledge.]
```

For the last 10 years Santander has been the leader in renewables financing, since 2014 ranking consistently among the banks in the top 3 by value of deals and top 1 by number of deals. The following data shows the evolution of the renewable financing offered by Santander in the last decade by value and number of deals$^{1}$:

For more details on Santander’s approach and performance regarding sustainable and climate finance, see our Climate Finance Report - June 2021. For additional information on how Santander conducts business, please read our policies.

$^1$ Source: Dealogic League tables Role: Mandated Lead Arranger Sectors: Wind + Renewable Fuel (solar, hydroelectric, biomass, geothermal and other).

# 2. Overview of Banco Santander´s Global Sustainable Bonds Framework$^{2}$

In 2019, we created a Global Sustainable Bond Framework and a Green Bond Framework in line with the ICMA Green and Social Bond Principles, and updated them in 2020. Both frameworks also align with and support Santander’s Responsible Banking strategy and outline our intention to allocate additional capital to green, social and sustainable operations. The Global Sustainable Bond Framework enables the issuance of green, social and sustainability bonds that promote sustainable development. Under the Framework, Santander committed to release an annual report that explains how the proceeds from each green bond issuance are used, in accordance with the Green Bond Framework.

We finance renewable energy projects as part of our mission to help people and businesses prosper; to aid the transition to a low-carbon economy; and to help fight climate change, reflecting our contribution to SDG 7: Affordable and clean energy.

**Green Bonds Use of Proceeds**
Eligible Green Asset categories:
* **Solar:** Eligible categories comprise photovoltaic (PV) plants and concentrated solar power.
* **Wind:** Eligible categories include onshore and offshore wind projects.

The net proceeds from green bond issuances will be used to finance and refinance loans related to:
Eligible projects include electricity generation from these technologies and any ancillary infrastructure such as transmission lines, substations, etc.

The use of proceeds report covers allocated funds; financed and refinanced assets; installed capacity and energy production; environmental impact (avoided emissions); and the proportion of new financing compared to existing funding. Our external auditor, PwC, verifies the tracking and allocation of funds from green bond proceeds.

$^2$ For more details, please see the [Global Sustainable Bonds Framework](https://www.santander.com/content/dam/santander-com/en/contenido-paginas/nuestro-compromiso/financiaci%C3%B3n-de-proyectos-sostenibles/prf-santander-green-bond-framework-june-2020-en.pdf)

# 3. Calculation methodology

**Avoided $\mathrm{CO}_2$ emissions:**

Every year, Santander (the issuer) estimates the $\mathrm{CO}_2$ emissions that the power generation attributable to its renewable energy portfolio avoids. Otherwise, emissions calculations come from the technology mix of associated national grids in the countries where the Eligible Assets are located. Here, we used latest available data from the International Energy Agency (IEA) emission factors ($\mathrm{tCO}_2/\mathrm{MWh}$). Please refer to Annex I for emission factors used and its comparison between emission factors used in Green Bond Report 2019.

Under this methodology, electricity generation (MWh) is based on the yearly production reported by project developers or, when not available, on the installed capacity (MW) and an adequate technology-specific load factor.

The impact measurement methodology we use is based on an internal estimate calculation according to the GHG Protocol and the Partnership for Carbon Accounting Financials (PCAF) standard for financed emissions.$^3$ It takes into account Santander’s share in the overall financing of each project, which includes both debt and equity (gearing). The 2019 Report only considered our share in the total outstanding debt, following market standards at the time.

$^3$ PCAF, which developed the banking industry’s main standard to assess financed emissions, will launch “green bonds greenhouse gas accounting methods” early next year to set specific avoided emissions calculation criteria. More recently, PCAF published a draft methodology paper for consultation describing the methodology to be used for Green Bond emissions reporting. According to the PCAF methodology, the denominator should include the total capital needed to finance the project. As per the standard is used to assess financed emissions, the denominator to assess avoided emissions should include the total amount of debt and equity already disbursed.

**Steps to calculate avoided emissions**

```mermaid
graph LR
A[Santander debt €Mn]
B[Total Debt + Equity €Mn]
C[Santander attribution factor %]
D[Full year total production MWH]
E[Production equivalent to Santander MWh]
F[IEA emissions factors tCO2/MWh]
G[Project emissions avoided equivalent to Santander tCO2]

A & B --> C
C & D --> E
E & F --> G
```

**Step 1 - Santander attribution factor:**

$Attribution Factor_p = \frac{\text{SAN outstanding debt}_p}{\text{Total outstanding debt}_p} * \text{Gearing}_p$

* $p$ is the project.
* SAN outstanding debt$_p$ is the outstanding amount of debt already disbursed by Santander at 31 December 2020.
* Total outstanding debt$_p$ + equity$_p$ is the total amount of outstanding debt at 31 December 2020.
* Gearing$_p$ is the ratio between debt and debt+equity at signing of project.

**Step 2 - Project production:**

To calculate the avoided $\mathrm{CO}_2$ emissions, we classified the eligible projects by virtue of their operational status and energy production calculation method:

* **In operation:** Projects that began up to and including 31 December 2019.
  * Avoided emissions calculated using actual production and Santander's share (MWh/year).
* **Under development:** Projects that began after and including 1 January 2020.
  * Avoided emissions calculated using estimated annual production, Santander's share (MWh/year) and the P50 estimation model.$^4$

We reassessed the emissions calculations in the Green Bond Report 2019 to include equity instead of the outstanding debt only. This aligns with Santander’s climate narrative and more recent international standards.

$^4$ An estimation model according to which the P50 value is the predicted annual production and for which there is a 50% probability that it will be exceeded in a given year. Source: Platform Carbon Accounting Financials (PCAF), Harmonising and implementing a carbon accounting approach for the financial sector, 2018.

# 4. Key figures

In October 2019, we issued a seven-year senior preferred €1 billion green bond and implemented our global sustainable debt issuance plan. Since then, we have continued to leverage on our origination capabilities to issue more green bonds and notes.

The green bond issuances as at 31 December 2020 were:
* October 2019: €1 billion senior preferred bond with a 7-year tenor issued under Banco Santander S.A (details in last year’s report).
* June 2020: €1 billion senior non-preferred bond with a 7-year tenor issued under Banco Santander S.A.
* December 2020: € 1million note with a 3-year tenor issued under SAN PRO (Retail Spain).

The issuances total € 2,001 million and are detailed below:

| Issuer | Banco Santander, S.A. | Banco Santander, S.A. | SANPRO (guarantor Banco Santander S.A.) |
| --- | --- | --- | --- |
| Issuer Rating | A (Stable)/ A2 (Stable) / A- (Stable) by S&P / Moody's / Fitch | Baa1 / A- / A- by Moody’s / S&P / Fitch | Notes have not been rated |
| Nominal Amount (EUR) | 1,000,000,000 | 1,000,000,000 | 1,000,000 |
| Pricing Date | 1 October 2019 | 18 June 2020 | 23 December 2020 |
| Maturity | 4 October 2026 | 23 June 2027 | 27 December 2023 |
| Instrument | Senior Preferred | Senior Non Preferred | Senior Preferred |
| Coupon | 0.30% | 1.13% | Constant Percentage (3.00%) if the Coupon Barrier Condition (103%) is satisfied in respect of a ST Coupon Valuation Date; otherwise: zero. |
| Use of Proceeds | Under Banco Santander´s Global Sustainable Bonds Framework | Under Banco Santander´s Global Sustainable Bonds Framework | Under Banco Santander´s Global Sustainable Bonds Framework |
| Second Party Opinion | The Second Party Opinion report by Vigeo Eiris$^1$ issued in May 2020 highlighted Santander’s ESG performance and qualified its performance as “advanced” (the highest score possible) in all three pillars: Environment, Social and Governance. | The Second Party Opinion report by Vigeo Eiris$^1$ issued in May 2020 highlighted Santander’s ESG performance and qualified its performance as “advanced” (the highest score possible) in all three pillars: Environment, Social and Governance. | The Second Party Opinion report by Vigeo Eiris$^1$ issued in May 2020 highlighted Santander’s ESG performance and qualified its performance as “advanced” (the highest score possible) in all three pillars: Environment, Social and Governance. |
| Listing | EuronextDublin | EuronextDublin | AIAF |
| ISIN | XS2063247915 | XS2194370727 | ES0305466056 |

$^1$ According to the Second Party Opinion on the Sustainability of Santander’s Green Bonds Framework issued by Vigeo Eiris in May 2020, Santander displays an advanced ESG performance, achieving an advanced performance in the Environment, Social and Governance pillars, as of February 2020. As for the Vigeo Eiris ESG score, in November 2019 Banco Santander reached a score of 63, positioning itself in a 5th place within a group of 31 diversified banks defined by Vigeo in 2019. Results for 2020 have not been published yet as of the date of issuance of the Green Bond report 2020.

# 5. Green bond allocation & impact report

### i. Use of proceeds

The proceeds from the green bonds issued in 2019 and 2020 (total notional amount of €2,001 million) have been allocated to 55 transactions: 23 greenfield and 32 brownfield projects that originated between 2016 and 2020 and represent a total drawn outstanding amount of €2,004 million.

In line with the Global Sustainable Bond Framework, the share of Eligible Assets allocated to existing loans at the date of each issuance does not exceed 50% of the total issued amount for any of the green bonds issued between 2019 and 2020. Existing loans represent 49% of the total issued amount.$^5$

$^5$ Calculated as a weighted average of the share of Eligible Assets allocated to existing loans at the date of each issuance.

### ii. Use of proceeds impact report

The following data shows the use of proceeds from green bonds issued in 2019 and 2020:

| Green Bonds Asset Allocation | Number of loans | Allocated Loan Amount (€mn) | Allocated Loan Amount % | Average SAN share (€mn) | % SAN of total project outstanding (debt+equity) |
| --- | --- | --- | --- | --- | --- |
| **Total general** | **55** | **2,004** | **100%** | **36** | **19%** |
| **Wind** | **26** | **1,238** | **62%** | **48** | **11%** |
| Offshore | 15 | 852 | 43% | 57 | 7% |
| Onshore | 11 | 386 | 19% | 35 | 16% |
| **Solar** | **29** | **766** | **38%** | **26** | **26%** |
| Photovoltaic | 25 | 652 | 33% | 26 | 28% |
| Thermosolar | 4 | 114 | 5% | 28 | 14% |

### iii. Installed capacity and avoided $\mathrm{CO}_2$ emissions

| | Belgium | Chile | Germany | Italy | Spain | The Netherlands | UK | "UK and Ireland" | US |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Nº of deal | 1 | 1 | 1 | 8 | 22 | 1 | 15 | 1 | 5 |
| Average SAN participation (EUR mn) | 49 | 20 | 4 | 22 | 31 | 111 | 58 | 28 | 16 |
| TOTAL installed Capacity | 487 | 110 | 252 | 406 | 3,244 | 600 | 10,580 | 223 | 1,025 |
| TOTAL installed Capacity (MW) attributed to SAN | 29 | 2 | 1 | 75 | 434 | 45 | 763 | 24 | 217 |
| TOTAL Production (MWh)$^{13}$ | 2,369,100 | 303,799 | 1,061,400 | 612,604 | 6,698,846 | 2,625,114 | 41,725,554 | 557,432 | 3,224,274 |
| TOTAL Production (MWh) equivalent to % SAN$^{14}$ | 141,150 | 5,674 | 3,890 | 118,577 | 902,667 | 198,852 | 2,579,109 | 60,454 | 665,054 |

$^{12}$ Portfolio with assets in both countries.
$^{13}$ Total production is based on actual production of the projects in operation before 01/01/2020, together with the estimated annual production of the projects that have/will come into operation after and including 01/01/2020, taking into account 100% of the global outstanding amount (MWh/year).
$^{14}$ Total production is based on actual production of the projects in operation before 01/01/2020, together with the estimated annual production of the projects that have/will come into operation after and including 01/01/2020 taking into account Santander’s share (MWh/year).

# Origination in 2020

We want to be our customers’ trusted partner in their transition towards a net zero economy. Clean energy is at the heart of the decarbonization of the economy, and Santander participates in accelerating the deployment of new installed renewable energy capacity in our core markets.

Despite a slowdown in activity due to the Covid-19 pandemic, in 2020 we continued to close renewable energy transactions worldwide. We were the global leader in renewable energy project finance for the third consecutive year, ranking #1 in the number of deals and in volume by Dealogic$^7$. Santander also ranked first by number of deals in EMEA and the Americas, demonstrating our commitment to that asset class and predominant role in tackling climate change.

In 2020, Santander helped finance 11,526MW of new installed capacity in Belgium, Chile, Germany, Spain, United Kingdom and United States. We also participated in the financing or refinancing of 5,402MW of existing projects in different geographies. 83% of the installed capacity of new projects were in the wind sector (onshore and offshore), while solar assets represented 17%.

In 2021, activity has continued to recover in all our markets, though recent supply chain and raw materials issues are causing delays to some projects. We remain #1 by number of deals,$^8$ with a strong outlook for the rest of the year. Among other roles,$^9$ Santander is financial advisor and joint lead arranger of the first ever utility scale 800MW offshore wind farm in the US (the “Vineyard I” project). Besides Vineyard I, we also want to highlight the most notable transaction that has been used as collateral for this allocation, the Dogger Bank Wind Farm project:

* **Vineyard Wind I – US, 2021:**
Vineyard Wind I is the first major offshore wind farm in the US, an 800 MW offshore wind farm to be constructed off the Massachusetts coast, 15 miles south of Martha’s Vineyard. The Project is jointly owned by Avangrid Renewables and Copenhagen Infrastructure Partners and is scheduled to complete construction by April 2024, making it the first commercial-scale offshore wind farm in the United States. Santander participated as Financial Advisor, Joint Lead Arranger, Hedge Coordinator, Syndication Agent, Administrative Agent, Green Loan Coordinator in the USD 2.5 Bn financing of of the first large-scale offshore wind farm in the US.

* **Dogger Bank Wind Farm:**
Participated in the financing of Dogger Bank, an offshore windfarm in the UK that will become the world’s biggest, being developed in three phases – Dogger Bank A, B and C – located between 130km and 190km from the North East coast of England at their nearest points. Each phase will have an installed generation capacity of 1.2GW and represents a multi-billion pound investment. Combined, they will have an installed capacity of 3.6GW and will to supply 5% of UK demand and power six million UK homes each year.

Total Eligible Assets amount to €3,559 mn, out of which €2,004 mn (56%) have been allocated to €2,001 mn of outstanding green bonds as at 31 December 2020.

$^6$ Others include Belgium, UK/Ireland, Chile and Germany.
$^7$ Source: Dealogic Regional Renewable Energy Project Finance MLA Rankings – Full Year 2020.
$^8$ Source: Dealogic Regional Renewable Energy Project Finance MLA Rankings – First Half 2021.
$^9$ Santander acts as financial advisor, joint lead arranger, hedge coordinator, syndication agent, administrative agent and green loan coordinator.
$^{10}$ A pan-European project that spans five countries (Belgium, France, Germany, Portugal and Spain) has been allocated to Spain.
$^{11}$ Others include The Netherlands, Sweden, Portugal, Belgium, United Kingdom/Ireland, Chile, Uruguay, Taiwan, France, Ireland and Germany.

# Avoided emissions metrics

Avoided emissions were calculated based on the estimated annual production of the projects that had yet to begin by 31 December 2019 and the annual production of the projects that began after and including 1 January 2020, taking into account Santander's share (MWh/year).

Avoided emissions for the period January 2020 to 31 December 2020 amounted to 1,117,682 tons of $\mathrm{CO}_2$ (558t $\mathrm{CO}_2$/Mn invested)$^{17}$, while the average intensity of the projects in the portfolio was 0.239 t $\mathrm{CO}_2$/MWh.

| Technology | Avoided $\mathrm{CO}_2$ emission, SAN’s Share ($\mathrm{tCO}_2$) | % | Avoided $\mathrm{CO}_2$ emissions with SAN’s Share ($\mathrm{tCO}_2$)/€ mn invested | Total avoided $\mathrm{CO}_2$ emissions ($\mathrm{tCO}_2$) | % |
| --- | --- | --- | --- | --- | --- |
| **Wind** | **834,503** | **75%** | **674** | **11,870,647** | **89%** |
| Projects in operation | 343,623 | 31% | 468 | 3,776,407 | 28% |
| Projects in development | 490,880 | 44% | 974 | 8,094,240 | 61% |
| **Solar** | **283,179** | **25%** | **370** | **1,528,824** | **11%** |
| Projects in operation | 46,003 | 4% | 121 | 442,945 | 3% |
| Projects in development | 237,176 | 21% | 613 | 1,085,879 | 8% |
| **TOTAL GENERAL** | **1,117,682** | **100%** | **558** | **13,399,471** | **100%** |

$^{17}$ Following impact measurement methodology best practice, which also considers the leverage of the projects (gearing) instead of the debt portion only, we recalculated the avoided $\mathrm{CO}_2$ emissions for the period 1 January 2019 to 31 December 2019. Updated avoided emissions accounted for 627,021 tons of $\mathrm{CO}_2$ (578 t $\mathrm{CO}_2$/mn invested) compared to 909,417 tons of $\mathrm{CO}_2$ (838t $\mathrm{CO}_2$/€ mn invested) calculated in the Green Bond Report 2019 using the outstanding debt-based impact measurement methodology.

# 6. Disclaimer

**IMPORTANT INFORMATION**

**Non-IFRS and alternative performance measures**
This report contains, in addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) and derived from our financial statements, 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 (ESMA/2015/1415en) and other non-IFRS measures (“Non-IFRS Measures”). These financial measures that qualify as APMs and non-IFRS measures have been calculated with information from Santander Group; however those financial measures are not defined or detailed in the applicable financial reporting framework nor have been audited or reviewed by our auditors. We use these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS measures to be useful metrics for our management and investors to compare operating performance between accounting periods, as these measures exclude items outside the ordinary course performance of our business, which are grouped in the “management adjustment” line and are further detailed in Section 3.2. of the Economic and Financial Review in our Directors’ Report included in our Annual Report on Form 20-F for the year ended 31 December 2021. Nonetheless, these APMs and non-IFRS measures should be considered supplemental information to, and are not meant 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. 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 2021 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on 1 March 2022, as well as the section “Alternative performance measures” of the annex to the Banco Santander Q4 2021 Financial Report, published as Inside Information on 2 February 2022. These documents are available on Santander’s website (www.santander.com). Underlying measures, which are included in this report, 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 included businesses 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.

**Forward-looking statements**
Banco Santander advises that this report contains “forward-looking statements” as per the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by words like “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RoRAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future” and similar expressions. Found throughout this report, they include (but are not limited to) statements on our future business development, economic performance and shareholder remuneration policy. However, a number of risks, uncertainties and other important factors may cause actual developments and results to differ materially from our expectations. The following important factors, among others, could affect our future results and could cause materially different outcomes from those anticipated in forward-looking statements: (1) general economic or industry conditions of areas where we have significant operations or investments (such as a worse economic environment; higher volatility in the capital markets; inflation or deflation; changes in demographics, consumer spending, investment or saving habits; and the effects of the COVID-19 pandemic in the global economy); (2) exposure to various market risks (particularly interest rate risk, foreign exchange rate risk, equity price risk and risks associated with the replacement of benchmark indices); (3) potential losses from early repayments on our loan and investment portfolio, declines in value of collateral securing our loan portfolio, and counterparty risk; (4) political stability in Spain, the United Kingdom, other European countries, Latin America and the US; (5) changes in legislation, regulations or taxes, including regulatory capital and liquidity requirements, especially in view of the UK exit from the European Union and increased regulation in response to financial crisis; (6) our ability to integrate successfully our acquisitions and related challenges that result from the inherent diversion of management’s focus and resources from other strategic opportunities and operational matters; and (7) changes in our access to liquidity and funding on acceptable terms, in particular if resulting from credit spreads shifts or downgrade in credit ratings for the entire group or significant subsidiaries.

Numerous factors could affect our future results and could cause those results deviating from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.

Forward-looking statements speak only as of the date of this report and are informed by the knowledge, information and views available on such date. Santander is not required to update or revise any forward-looking statements, regardless of new information, future events or otherwise.

**No offer**
The information contained in this report is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this report. No investment activity should be undertaken on the basis of the information contained in this report. In making this report available Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.

Neither this report nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this report is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.

**Historical performance is not indicative of future results**
Statements about historical performance or accretion must not be construed to indicate that future performance, share price or future earnings (including earnings per share) in any future period will necessarily match or exceed those of any prior period. Nothing in this report should be taken as a profit forecast.

**Third Party Information**
In particular, regarding the data provided by third parties, neither Santander, nor any of its administrators, directors 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, may omit partially or completely any of the elements of this report, and in case of any deviation between such a version and this one, Santander assumes no liability for any discrepancy.

# 7. Annex

### I. IEA emission factors

| Country | Emissions factor ($\mathrm{tCO}_2/\mathrm{MWh}$) Report 2020 | Emissions factor ($\mathrm{tCO}_2/\mathrm{MWh}$) Report 2019 |
| --- | --- | --- |
| Spain | 0.198 | 0.288 |
| Portugal | 0.236 | 0.359 |
| Italy | 0.285 | 0.326 |
| UK | 0.208 | 0.245 |
| France | 0.054 | 0.069 |
| Brazil | 0.104 | |
| Chile | 0.442 | 0.435 |
| Uruguay | 0.014 | |
| Mexico | 0.477 | |
| Australia | 0.685 | |
| USA | 0.382 | 0.421 |
| Peru | 0.202 | |
| The Netherlands | 0.368 | 0.437 |
| Canada | 0.129 | |
| Ireland | 0.294 | 0.378 |
| Germany | 0.345 | 0.417 |
| United Arab Emirates | 0.505 | |
| Hungary | 0.227 | |
| Puerto Rico | 0.184 | |
| Belgium | 0.165 | 0.17 |
| Argentina | 0.287 | |
| Taiwan | 0.554 | |

### II. PWC Independent Limited Assurance Report