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2024 Annual report Unless otherwise specified, references in this annual report to other documents, including but not limited to other reports and websites, including our own, are for information purposes only. If the contents of such other documents and websites refer to this annual report, they are not nor should be considered part of it. Unless the context suggests otherwise, 'Banco Santander' means Banco Santander, S.A., and 'Santander', 'the Group' and 'Grupo Santander' mean Banco Santander, S.A. and subsidiaries. |  |

C onsolidated directors’ report

BUSINESS MODEL AND STRATEGY | 7

THE SANTANDER WAY | 8
OUR BUSINESS MODEL | 9
2024 RESULTS | 10
LOOKING AHEAD | 17

SUSTAINABILITY STATEMENT | 18

Consolidated non-financial information and sustainability
information statement

1. SUSTAINABILITY AT SANTANDER (General information) | 22
2. OUR CLIMATE TRANSITION PLAN (Environmental information) | 32
3. SUPPORTING EMPLOYEES, COMMUNITIES AND CUSTOMERS (Social information) | 75
4. BUSINESS CONDUCT (Governance information) | 100
SUSTAINABILITY NOTES | 107
INDEPENDENT VERIFICATION REPORT | 218
OTHER SUSTAINABILITY INFORMATION | 224

CORPORATE GOVERNANCE | 232

1. 2024 OVERVIEW | 235
2. OWNERSHIP STRUCTURE | 241
3. SHAREHOLDERS AND GENERAL MEETING | 247
4. BOARD OF DIRECTORS | 255
5. SENIOR MANAGEMENT TEAM | 305
6. REMUNERATION | 307
7. GROUP STRUCTURE AND INTERNAL GOVERNANCE | 336
8. INTERNAL CONTROL OVER FINANCIAL REPORTING (ICFR) | 339
9. OTHER CORPORATE GOVERNANCE INFORMATION | 346

ECONOMIC AND FINANCIAL REVIEW | 384

1. ECONOMY, REGULATION AND COMPETITION | 387
2. GROUP SELECTED DATA | 392
3. GROUP FINANCIAL PERFORMANCE | 394
4. FINANCIAL INFORMATION BY SEGMENT | 437
5. RESEARCH, DEVELOPMENT AND INNOVATION (R&D&I) | 478
6. SIGNIFICANT EVENTS SINCE YEAR END | 481
7. TREND INFORMATION 2025 | 482
8. ALTERNATIVE PERFORMANCE MEASURES (APMs) | 492

RISK MANAGEMENT AND COMPLIANCE | 502

1. RISK MANAGEMENT AND CONTROL MODEL | 505
2. CREDIT RISK | 512
3. MARKET, STRUCTURAL AND LIQUIDITY RISK | 524
4. CAPITAL RISK | 535
5. OPERATIONAL RISK | 537
6. COMPLIANCE RISK | 543
7. MODEL RISK | 549
8. STRATEGIC RISK | 551

Auditor's report and consolidated financial statements

AUDITOR'S REPORT | 562
CONSOLIDATED FINANCIAL STATEMENTS | 572

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 588
APPENDIX | 824

GENERAL INFORMATION | 868

Annual report 2024 4

| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

2024 consolidated
directors’ report
This report was approved unanimously by our board
of directors on 25 February 2025
Our approach to this document
We changed the layout of our consolidated directors’ report in
2018 to include the contents previously provided in these
documents, which we no longer prepare separately:
• Annual report
• Consolidated directors’ report
• Annual corporate governance report (CNMV format document)
• Board committee reports
• Sustainability report
• Annual report on our directors’ remuneration (CNMV format
document)
The consolidated directors’ report also includes all information
required by Spanish Act 11/2018 on non-financial information and
diversity and the information on sustainability prepared by the
Group in accordance with the European Standards of Sustainability
Reporting (ESRS). It can be found in the 'Sustainability statement'
chapter, which constitutes the consolidated non-financial
information statement and sustainability information.
Auditors’ reviews
As required by law, our 2022 consolidated directors’ report was
subject to three reviews by our independent statutory auditors,
PricewaterhouseCoopers Auditores, S.L. They can be summarized
as follows:
• PricewaterhouseCoopers Auditores, S.L. verified that the
information in this report is consistent with our consolidated
financial statements and that its contents comply with applicable
regulation. For more details, see 'Other information:
Consolidated management report section of the 'Auditor’s report'
within 'Auditor's report and consolidated annual accounts'.
• PricewaterhouseCoopers Auditores, S.L., issued a verification
report, with limited assurance, on the Consolidated Non-
Financial Information statement and the information on
sustainability required under Act 11/2018 and under the
European Standards of Sustainability Reporting (ESRS) included
in this consolidated directors' report. To read the verification
report, see the 'Independent verification report' in the
'Sustainability statement' chapter.
• PricewaterhouseCoopers Auditores, S.L. issued an independent
reasonable assurance report on the design and effectiveness of
Banco Santander's internal control over financial reporting,
which can be found in section 8.6 'External auditor report' of the
'Corporate governance' chapter.
Non-IFRS and alternative performance measures
This report 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 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.
For more details on APMs and non-IFRS measures, see section 8.
'Alternative performance measures (APMs)' of the 'Economic and
financial review' chapter and section SN 9 'Alternative performance
measures (APMs)' of the 'Sustainability statement' chapter.
Annual report 2024 5

| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

Sustainability information
This report contains, in addition to financial information,
sustainability-related information, including environmental, social
and governance-related metrics, statements, goals, targets,
commitments and opinions. The sustainability information can be
found throughout the report but mostly in the 'Sustainability
statement' chapter.
The sustainability information is provided in accordance with
Directive 2022/2464 on corporate sustainability reporting (CSRD)
and Law 11/2018 on non-financial and diversity reporting.
Sustainability information is not audited nor, save as expressly
indicated under ‘Auditors’ reviews’ , 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 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. 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
Banco Santander hereby warns that this annual report contains
'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 described elsewhere in
this report), 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 approval of this annual report 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.
Annual report 2024 6

| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

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 in this annual
report should be taken as a profit and loss forecast.
XHTML electronic format and XBRL tags
This annual report was prepared in eXtensible HyperText Markup
Language (XHTML) format. The consolidated financial statements
and the notes to the consolidated financial statements that it
includes, have been tagged with eXtensible Business Reporting
Language (XBRL), in accordance with Directive 2004/109/EC and
Commission Delegated Regulation (EU) 2019/815.
To view the XBRL tags, you must open this document with an
appropriate viewer. You can find this document with an XBRL
viewer on Banco Santander's corporate website.
Not a securities offer
This annual report and the information it contains does not
constitute an offer to sell, nor a solicitation of an offer to buy any
securities.
Glossary of terms, acronyms and abbreviations
To facilitate a better understanding of this annual report, a
glossary of terms, acronyms and abbreviations has been included
at the end of the consolidated directors' report.
Annual report 2024 7

| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

BUSINESS MODEL
AND STRATEGY
Annual report 2024 8

| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

THE SANTANDER WAY

| Our purpose |  |  |  | Our aim |  |  |  | Our how |
| To help people and businesses prosper |  |  |  | To be the best open financial services platform by acting responsibly and earning the lasting loyalty of our people, customers, shareholders and communities |  |  |  | Everything we do should be Simple, Personal and Fair |

Annual report 2024 9

| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

OUR BUSINESS MODEL
Generating value for our stakeholders

CUSTOMER FOCUS |  | Building a digital bank with branches

→ Customer focus is the essence of our strategy. Our multichannel
offering enables us to fulfil all our customers' financial needs,
making us their global, trusted and responsive partner.
→ Our customer growth investments are centred around three basic
things: provide great products at competitive prices, a frictionless
digital experience and being a trusted financial partner.
→ We are building a digital bank with branches to make our
customers' lives easier. By merging technology with human
touch, we offer fully-digital products while ensuring our branches
provide support and advice. This blend of innovation and
personalization ensures our customers get the best of both
worlds.

| 2023 | 2024
Total customers (mn) | 165 | 173
Active customers (mn) | 100 | 103

SCALE |  | Global & in-market scale

→ Santander has a unique combination of global scale and local
leadership (top 3 in lending, deposits and mutual funds in most of
our markets).
→ Our activities are organized under five global businesses: Retail &
Commercial Banking, Digital Consumer Bank, Corporate &
Investment Banking, Wealth Management & Insurance and
Payments.
→ These five global businesses support value creation based on the
profitable growth and operational leverage that ONE Santander
provides.
→ Our global approach to technology and development of global
platforms is helping us to provide our customers with cost
competitive products and the best digital experience.

|  |  |  |  |  |  |  |  |  |  | ONE Santander
Global businesses |  | Retail | Retail & Commercial Banking | }
Consumer | Digital Consumer Bank | }
CIB | Corporate & Investment Banking | }
Wealth | Wealth Management & Insurance | }
Payments | Payments | }

DIVERSIFICATION |  | Business, geographical and balance sheet

→ Our simple and well-targeted range of products and services
meets the needs of a wide spectrum of customers: individuals,
SMEs, mid-market companies, large corporates, Wealth
Management customers, first-time banking customers, auto
customers and dealers, and card customers.
→ Santander has a strong, simple and diversified balance sheet,
with a low exposure to market risk and is highly collateralized
and made up mainly of loans.
→ Diversification and a medium-low risk profile deliver recurrent
pre-provision profit, with among the lowest volatility across
peers.

Group net operating income (pre-provision profit)
EUR billion

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2024 RESULTS
Record results for the third consecutive year, creating value for shareholders

→ Record profit on the back of 8mn new customers YoY and strong revenue growth → A groundbreaking year in our transformation, driving strong operating performance and profitable growth → Solid balance sheet with sound credit quality and capital ratio, reflecting all-time high organic generation → Delivering double-digit value creation and higher shareholder remuneration

FY’24 Attributable Profit |  | FY’24 Revenue
€12.6bn +14% |  | €62.2bn +8%
Efficiency |  | RoTE
41.8% –226bps |  | 16.3% +121bps
CoR |  | FL CET1
1.15% -3bps |  | 12.8% +51bps
TNAVps + DPS |  | Cash DPS paid in 2024
+14% |  | +39%

Note: Based on underlying P&L. YoY changes in euros. In constant euros: FY'24 attributable profit +15% vs. FY’23; FY'24 revenue +10% vs. FY’23. For more information on
figures presented in constant euros and the alternative performance measures presented above and across this chapter, see section 8. 'Alternative performance measures'.
TNAVps + Cash dividend per share (DPS) includes the €9.50 cent cash dividend per share paid in May 2024 and the €10.00 cent interim cash dividend per share paid in
November 2024. Growth in Cash DPS corresponds to the total cash dividend per share paid during 2024 compared to the cash dividends per share paid during 2023. For more
details, see section 3.3 ‘Dividends and shareholder remuneration’ in the ‘Corporate governance’ chapter. Implementation of the shareholder remuneration policy is subject to
future corporate and regulatory decisions and approvals.
We delivered on all our financial targets, which we upgraded in the
Q2'24 earnings presentation A

| 2024 targets A | 2024 achievements |
Revenue B | High-single digit growth | +10% | ü
Efficiency ratio | c.42% | 41.8% | ü
CoR | c.1.2% | 1.15% | ü
FL CET1 | >12% | 12.8% | ü
RoTE | >16% | 16.3% | ü

A. Some targets were upgraded in the Q2'24 results presentation: i) revenue from mid-single digit growth to high-single digit growth; ii) efficiency ratio from <43% to
c.42%; iii) RoTE from 16% to >16%. FL CET1 target >12% after FL Basel III implementation, FL definition as of 1 January 2025.
B. YoY change in constant euros.
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Over the last 10 years our transformation and unique business model have
consistently delivered profitable growth
A. Total shareholder remuneration charged against the results corresponding to the calendar year: cash dividend + share buybacks excluding scrip dividends. Implementation
of 2024 shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals.
We are in a phase of value creation, driven by higher profitability
underpinned by three tenets:

| Think Value |  |  | Delivering double-digit value creation, on average through-the-cycle |
| Think Customer |  |  | Building a digital bank with branches with well-targeted products and services to grow our customer base |
| Think Global |  |  | Leveraging global and in-market scale, network and tech to deliver world class-services and accelerate profitable growth |

Annual report 2024 12

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Think Value
Delivering double-digit value creation, on average through-the-cycle
→ We are entering the last year of our strategic cycle well ahead of all our key Investor Day targets for 2025
2024 vs. ID targets for 2025

| Strength |
| FL CET1 12.8% >12% |

| Shareholder remuneration |
| Payout 50% Cash dividend + SBB 50% annually |

| Disciplined capital allocation |
| RWAs with RoRWA > CoE 87% c.85% |

| Profitability |
| RoTE 16.3% 15-17% |

Note: target payout defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividend and 50% in
share buybacks. Execution of the shareholder remuneration policy is subject to future corporate and regulatory decisions and approvals. For more details, see section 3.3
‘Dividends and shareholder remuneration’ in the ‘Corporate governance’ chapter.
Think Customer
Building a digital bank with branches with well-targeted products and services to grow our customer
base
→ We are committed to delivering simple, lovable, life-centric products and experiences for customers

|  |  | 2023 | 2024
Customer centric | Total customers (mn) |  | 165 | 173
Simplification & automation | Efficiency ratio (%) |  | 44.1 | 41.8
Customer activity | Active customers (mn) |  | 100 | 103

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Think Global
Leveraging global and in-market scale, network and tech to deliver world class-services
and accelerate profitable growth
→ Our transformation and five global businesses deliver higher revenue with lower costs structurally, supporting our ambition to
become the most profitable bank in every market where we operate
Our five global businesses
We are a global Retail and Consumer powerhouse with 173 million customers
Strong results underpinned by growth across our five global businesses

| 2024 vs. 2023 | Revenue (€bn) | Contribution to Group revenue | Efficiency | Profit (€bn) | RoTE
| Retail | 32.5 +11% | 52% | 39.7% -3.4pp | 7.3 +29% | 18.8% +3.7pp
| Consumer | 12.9 +6% | 20% | 40.1% -2.7pp | 1.7 -12% | 9.8% -1.8pp 12.0% excluding CHF and Motor Finance
| CIB | 8.3 +14% | 13% | 45.6% +0.6pp | 2.7 +16% | 18.0% +0.5pp
| Wealth | 3.7 +15% | 6% | 35.9% -2.0pp | 1.6 +14% | 78.7% +6.5pp
| Payments | 5.5 +9% | 9% | 45.0% +0.7pp | 0.7 A +18% | PagoNxt EBITDA margin 27.5% +2.7pp
| Note: YoY changes in constant euros. Contribution to Group revenue as a percentage of total operating areas, excluding the Corporate Centre. Global businesses’ RoTEs are adjusted based on Group’s deployed capital. For more information, see section 8 'Alternative performance measures' of the 'Economic and financial review' chapter. A. Payments profit and YoY profit growth exclude the write-downs of our investments related to our merchant platform in Germany and Superdigital in Latin America.

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Retail & Commercial Banking
Delivering operational leverage with a groundbreaking year in our transformation
Note: data and YoY changes in constant euros.
A. Metrics cover all products and employees in the branch network in our 10 main countries.
Digital Consumer Bank
Openbank roll out demonstrates the benefits of our strategy to deliver the best solutions to
customers and transform our operating model
Note: data and YoY changes in constant euros.
ANEAs: average net earning assets, including renting.
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Corporate & Investment Banking
Leveraging our strengths to serve our corporate customers and institutions better
Note: data and YoY changes in constant euros.
Wealth Management & Insurance
Accelerating our customers’ connectivity with our global product platforms
Note: data and YoY changes in constant euros.
Assets under management includes deposits and off-balance sheet assets. Revenue including ceded fees includes all fees generated by Santander Asset Management and
Insurance, even those ceded to the commercial network, which are reflected in Retail’s P&L.
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Payments
Seizing a growing opportunity by capturing scale through global platforms
Note: data and YoY changes in constant euros.
Transactions include merchant payments, cards and electronic A2A payments. Payments volume includes PagoNxt Total Payments Volume (TPV) in Getnet (PagoNxt) and
Cards turnover.
Network effects and global tech approach: unlocking our Group's potential
We are managing technology globally, implementing the best and most innovative common
platforms across the Group, so that we develop the best technology once and operate it centrally
→ We are leveraging Artificial Intelligence (AI) to enhance efficiency, customer experience and agility. We aim to place AI at the core of
every process and customer interaction.

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LOOKING AHEAD
Our consistent track record and the implementation of ONE Santander
gives us the confidence to aim higher for 2025

2025 Group targets
Revenue |  | Fees |  | Cost base |  | CoR |  | CET 1 |  | RoTE
c.€62bn |  | Mid-high single digit growth |  | Down vs. 2024 in euros |  | c.1.15% |  | 13% operating range: 12%-13% |  | c.16.5% post-AT1 A >17% pre-AT1
Return up to €10bn to our shareholders through share buybacks cumulative for 2025-26 Our existing c.50% payout ratio (half cash dividend) will be supplemented with exceptional SBBs using excess capital B
Double-digit growth of TNAV per share + dividend per share through-the-cycle
Note: Targets presented in this chapter are market dependent and do not represent guidance. Actual results may vary materially. A. RoTE post-AT1: Group attributable profit – cost of AT1s / average of: net equity (excluding minority interests) – intangible assets (including goodwill). B. Share buyback target corresponding to 2025-26 including: i) the buybacks resulting from application of our existing shareholder remuneration policy plus; ii) additional buybacks to distribute excesses of our CET1. Existing shareholder remuneration policy defined as c.50% of Group reported profit (excluding non-cash, non-capital ratios impact items), distributed approximately 50% in cash dividends and 50% in share buybacks. The implementation of the shareholder remuneration policy and any share buybacks to distribute CET1 surpluses are subject to future corporate and regulatory decisions and approvals.

We are creating value for our shareholders by focusing on delivering
profitable growth in a responsible way

| 2023 | 2024 | 2025 targets
Green finance raised and facilitated (since 2019) | €115.3bn | €139.4bn | €120bn
Socially responsible investments (AuMs) | €67.7bn | €88.8bn | €100bn
Financial inclusion (# People) | 1.8mn | 4.3mn | 5mn

Note: information has been verified with limited assurance by PricewaterhouseCoopers Auditores, S.L. For more details, see the 'Sustainability statement' chapter and metrics
definitions see section SN 9. 'Alternative Performance Measures' of the same chapter.
Not taxonomy. Financial inclusion (# people, mn): starting Jan-23. Does not include financial education.

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SUSTAINABILITY
STATEMENT
Consolidated non-financial information statement and
sustainability information
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SUSTAINABILITY AT SANTANDER
IN 2024
10 highlights
Our activity helps people and businesses prosper and contributes
to address global challenges

| 1 |  |  | EUR 350.5 billion to help people buy homes, enabling 3.7 million families to access housing. EUR 214.2 billion to purchase other goods.A |
| 2 |  |  | EUR 330 billion to help set up or grow companies (including more than 530 thousand SMEs and self- employed).B |
| 3 |  |  | 206,753 employee s. EUR 14.3 billion paid in wages and benefits. |
| 4 |  |  | EUR 11.6 billion paid to suppliers. 89% are local and account for 88% of total procurement turnover. |
| 5 |  |  | EUR 10.9 billion in taxes paid by the Group and EUR 11.5 billion in third party taxes channelled to tax authorities. |
| 6 |  |  | EUR 139 billion in green Finance raised and facilitated since 2019, reaching our EUR 120 billion target 18 months early and maintaining our leadership position in the financing of renewable energy projects. |
| 7 |  |  | Additionally, our credit stock in green mortgages and auto (EU taxonomy aligned) grew 27% year over year, supporting the alignment of our portfolios. |
| 8 |  |  | We continue to make progress towards our target of EUR 100 billion of assets under management in SRI (Socially Responsible Investment), reaching EUR 89 billion in 2024. |
| 9 |  |  | 4.3 million people financially included since 2023, getting closer to our 5 million target until 2025. Our microfinance propositions in Latin America reached 1.3 million underbanked entrepreneurs with EUR 1.27 billion in credit disbursed. |
| 10 |  |  | EUR 166 million in community support, including EUR 104 million to promote higher education, employability and entrepreneurship. |

A. Credit stock and mortgage holdings as at 31 December 2024.
B. Credit stock as at 31 December 2024. Data for Small and Medium Enterprises (SMEs) and the self-employed covers individual customers with an outstanding loan at 2024
year end.
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ABOUT THIS CHAPTER
Scope
This chapter covers the core activities of Banco Santander and its
subsidiaries from 1 January to 31 December 2024 (for more
details, see Notes 1, 2, 3 and 53 to the consolidated financial
statements and sections 3 and 4 in the 'Economic and financial
review' chapter). The scope of information and changes in criteria
applied with respect to the 2023 Sustainability Report, when
significant, are reflected in each relevant section and generally in
the 'Sustainability note 1' of this chapter.
Regulation, reporting standards and other references
that this chapter addresses
This chapter contains the 'Consolidated non-financial information
statement and sustainability information' of Grupo Santander, in
compliance with Directive (EU) 2022/2464, with regard to the
presentation of information on sustainability by companies,
prepared in accordance with Law 11/2018, EU guidelines 2017/
C215/01 on non-financial reporting, Delegated Regulation (EU)
2023/2772 supplementing Directive 2013/34/EU of the European
Parliament and of the Council with regard to sustainability
reporting rules, and the Regulation on European Taxonomy
(Regulation (EU) 2020/852 and Commission Delegated Regulations
2021/2139 and 2021/2178 as amended by Delegated Regulations
(EU) 2022/1214, 2023/2485 and 2023/2486). This report shows
the performance of Grupo Santander in those environmental, social
and governance issues that have been identified as material from a
double materiality perspective. Its purpose is to provide
stakeholders with a fair and balanced picture of the most relevant
aspects, objectives, practices and results of the 2024 exercise.
External validation
PricewaterhouseCoopers Auditores, S.L., an independent firm
charged with auditing the financial statements of Banco Santander
S.A., issued a verification report, with limited assurance, on the
Consolidated Non-Financial Information and sustainability
statement required und er Act 11/2018 an d the European
Sustainability Reporting Standards (ESRS). The report’s conclusion
can be found in the 'Independent verification report' at the end of
this chapter. For more details on the preparation and levels of
control of sustainability information, see the 'Sustainability
information' section in the introductory pages of this consolidated
management report 2024, and the 'Sustainability note 1 and 2' in
this chapter.

| For more details, see 'Sustainability information' in the introduction of this Annual report

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CO NTEN TS

SUSTAINABILITY AT SANTANDER IN 2024 | 19
ABOUT THIS CHAPTER | 20
1. SUSTAINABILITY AT SANTANDER (General information) | 22
1.1 Sustainability strategy | 22
1.2 Stakeholder engagement | 24
1.3 Materiality assessment | 27
1.4 Sustainability governance | 29
2. OUR CLIMATE TRANSITION PLAN (Environmental information) | 32
2.1 Strategy | 32
2.2 Supporting our customers in their transition goals | 35
2.3 Embedding ESG in risk management | 40
2.4 Aiming to align our activity with the Paris Agreement Goals | 59
2.5 Further actions and enablers | 72
3. SUPPORTING EMPLOYEES, COMMUNITIES AND CUSTOMERS (Social information) | 75
3.1 Our employees | 75
3.1.1 Talent and skills development | 75
3.1.2 Working conditions | 77
3.1.3 Inclusive culture | 80
3.1.4 Employee feedback and experience | 82
3.2 Communities' sustainable development | 83
3.2.1 Supporting the economic and social development of our communities | 83
3.2.2 Responsible investment and social finance | 83
3.2.3 Environmental, social and climate change management | 86
3.2.4 Community Support | 88
3.3 Our customers | 91
3.3.1 Conduct with customers | 92
3.3.2 Financial inclusion and financial health | 94
3.3.3 Privacy, data protection and cybersecurity | 97

4. BUSINESS CONDUCT (Governance information) | 100
4.1 Corporate culture | 100
4.2 Ethical conduct | 101
4.3 Ethical channels | 104
4.4 Our suppliers | 105
SUSTAINABILITY NOTES | 107
SN 1. Introduction, basis of presentation of the Sustainability statement and other information | 107
SN 2. Sustainability governance | 117
SN 3. Materiality assessment – Detailed methodology | 121
SN 4. Our transition plan | 129
SN 5. EU Taxonomy | 131
SN 6. Sustainable finance and investment classification system (SFICS) | 133
SN 7. Our progress in figures | 134
SN 8. Additional metrics to comply with Spanish Act 11/2018 | 200
SN 9. Alternative performance measures (APMs) | 202
SN 10. Non-financial information Act 11/2018 content index | 205
SN 11. Commission Delegated Regulation (EU) 2023/2772 on sustainability reporting standards content index | 210
INDEPENDENT VERIFICATION REPORT | 218
OTHER SUSTAINABILITY INFORMATION | 224
1. Our progress in relation to UN (United Nations) Global Compact Principles | 224
2. Our contribution to United Nations Sustainability Development Goals | 226
3. Our progress in relation to the Principles for Responsible Banking UNEP FI | 227
4. GFANZ transition planning content index | 228
5. Task Force on Climate related Financial Disclosure (TCFD) content index | 229
6. Table of equivalence between CSRD and ISSB | 230

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1. SUSTAINABILITY
AT SANTANDER
(General information)
1.1 Sustainability strategy
Grupo Santander’s purpose is to help people and businesses
prosper. We aim to be the best open financial services platform by
acting responsibly and earning the lasting loyalty of our
employees, customers, shareholders and communities.
Grupo Santander serves more than 173 million customers
worldwide through our unique combination of global scale and
local leadership. We are among the top 3 in lending, deposits and
mutual funds in most of our core markets. Our diverse customer
base includes individuals, SMEs, large corporates, high net worth
clients and others, all with varying financial needs and
expectations. Our simple, tailor-made products and services,
coupled with our multichannel proposition, seek to meet those
needs.
Santander has over 200 thousand employees and our activities are
organized under five global businesses: Retail and Commercial
Banking; Digital Consumer Bank; Corporate and Investment
Banking; Wealth Management and Insurance; and Payments.
We deliver our multichannel customer proposition in the following
core markets (some mature, some emerging) in Europe, North
America and South America: Spain, Portugal, United Kingdom,
Poland, United States, Mexico, Brazil, Chile and Argentina.

| For more details on the value chain, see SN 1. For more details on the distribution of employees by geographical area, see table 1. Employees by region in SN 7.3. Our progress in figures. Employees

Our sustainability strategy focuses on issues that are material to
Santander, i.e. those that pose the biggest risks to, and create the
best opportunity for, and where we can have the biggest impact.
This strategy, which is consistent with our double materiality
assessment (see section 1.3 'Materiality assessment'), has five pillars:
1. Help our customers in meeting their goals in their transition to a
low-carbon economy while also managing climate-related risks
and impacts.
2. Help our employees develop by promoting an inclusive culture
and learning and providing fair working conditions.
3. Contribute to the economic, financial and social development of
our communities, with a special focus on education,
employability and entrepreneurship.
4. 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.
5. Act responsibly through a strong culture, governance and
conduct.
Our sustainability strategy embeds the Group’s 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.
→ 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 policy is embedded in the strategies of
the five global businesses, with metrics and targets that form part
of our remuneration schemes.

| For more details, see chapter 1.4 'Sustainability governance'

1 PVC: Polyvinyl Chloride; PLA: biodegradable plastic made from renewable sources.
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Retail and Commercial Banking
Our ambition is to be a driver of growth and to provide value-added
solutions for our customers.
Our sustainable value propositions uphold high standards of
integrity for all customer and user segments (from individuals to
SMEs, large corporates and institutions).
We also collaborate with multilateral development banks, aligning
our financial activity with support for countries' sustainable and
energy transition.
We measure the emissions of the relevant portfolios of
commercial and residential properties in Spain and the United
Kingdom (UK) or Agriculture in Brazil, identifying alignment levers
towards the transition.
We also provide financial inclusion solutions and have a target to
financially include five million people between 2023 and 2025.
This includes helping underbanked through microfinance and
access initiatives. We also run financial education activities to
bolster our financial inclusion programmes.
Santander is also aiming to invest EUR 400 million in education,
employability and entrepreneurship between 2023 and 2026,
while increasing the number of people engaged in these
programmes, including through platforms such as Santander Open
Academy.
Digital Consumer Bank
Our ambition is to bolster our sustainable finance proposition by
tapping into potential opportunities in both, the auto finance
market where we are global leader in auto financing with more
than 20 million customers, and the consumer finance market.
We are supporting the green transition through electric vehicle
financing — EUR 6.8 billion in loans in the year, with a market
share of over 12% in electric vehicle sales in Europe. An increased
share of electric vehicles contributes to the alignment of the auto
financing portfolio in Europe and to our 2030 alignment target.
Corporate and Investment Banking
Our ambition is to be a strategic partner for our customers by
helping them achieve their low-carbon transition and sustainability
goals.
We support our customers in pursuing their transition to a low-
carbon economy and sustainable objectives by offering them
value-added products and services that follow the strictest
integrity standards without compromising profitability. We are
focused on capturing business opportunities around (i) clean
energy and ClimateTech advisory services, (ii) structured finance,
and (iii) risk management solutions.
We continue to strengthen our leadership in sustainable finance,
which enables us to harness opportunities to finance the green
transition. Santander has been a leader in renewable energy
project finance for the past decade. In 2024, we exceed our target
of EUR 120 billion in green finance raised or facilitated (between
2019 and 2025) 18 months early. We also acted as adviser on
several of the globe’s biggest renewable energy transactions.
Through our initiatives, we help our customers draw up their
transition plans and progress towards achieving our climate
objectives in high-emitting sectors.
Wealth Management and Insurance
Our ambition is to foster sustainability through our leading global
private banking platform and best-in-class funds and insurance
product factories.
We’re boosting our sustainable product proposition while moving
towards our target of EUR 100 billion in assets under management
in socially responsible investment (SRI) by 2025. Our products
include a wide range of fixed income, equity, mixed and alternative
funds, as well as themed products focused on climate, energy
transition and natural capital. In addition, we have SRI life-savings
portfolios and products, as well as the ability to build customized
mandates around specific sustainability preferences.
Moreover, Santander Asset Management is strengthening
engagement and voting initiatives through dialogue on climate
change issues with portfolio companies and considering climate
criteria in voting at shareholder meetings of companies under the
scope of its Voting policy.
Payments
We are working on lowering the footprint of our cards by issuing
more cards made of sustainable material and recycling more cards.
We’re also looking to offer our customers the possibility of
calculating and offsetting the footprint of their transactions.
In 2024, we acquired 39 million cards (84% of the year's total)
made of sustainable materials (recycled PVC or PLA). 1
Embedding our sustainability strategy
Santander’s sustainability strategy forms part of the Group’s
strategic plan, three-year financial plans and annual budget (every
year). Our Chief Executive Officer (CEO) leads the preparation of
our financial plan every year. The plan includes sustainability
targets and priorities that are consistent with our long-term
strategy. The strategy committee, executive committee and the
Group board of directors review the plan’s outcome. Furthermore,
all global businesses and each subsidiary has its own financial plan
that we review so that it aligns with the Group plan.
The risk area conducts an analysis and challenge of the strategic
plan (Risk Challenge) to identify potential threats that may
compromise the achievement of the Group's objectives. The risk
control committee discusses the outcome of this analysis and
reports to the board's risk supervision, regulation and compliance
committee. Additionally, Santander has a risk management control
model to identify, assess, mitigate, monitor and report all material
risks, including Environmental, Social and Governance (ESG), that
we may face and that may affect our strategy or business model.
We base this model on the Group's risk principles and culture; a
clear governance structure; and advanced risk management tools
and procedures.
Likewise, Santander regularly conducts an emerging risks exercise
to identify key threats to our strategic plan under theoretical stress
scenarios with low likelihood of occurrence. We aim to detect,
assess and monitor risks that may have a significant impact on our
business model, profitability and solvency to promote our strategy
remains robust.
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1.2 Stakeholder engagement
Santander remains in constant dialogue with its stakeholder
groups, particularly employees, customers, shareholders and
communities, who we engaged as part of our materiality
assessments and human rights due diligence, as we outline in this
report. Grupo Santander is committed to the principles of
transparency, honesty and impartiality in its engagement with
stakeholders. We believe that working with our stakeholders is key
to understanding their concerns, setting priorities, and when
possible, spotting opportunity and areas for improvement.
Stakeholders’ views help us develop key processes such as
drawing up our strategy, financial plans and definition of goals.
Group, subsidiary and global business senior management and
executive committees as well as to the Board, when presenting the
conclusions of the double materiality analysis, review, debate and
agree on implications. The outcome of these listening exercises has
helped drive our customer-centric focus, creation of new business
teams to help meet customers' needs, and the reinforcement of
operational procedures on service quality, security and agility.
We adapt our stakeholder engagement objectives for each group:
• Employees. We run three main listening exercises:
• Your Voice: a tool to collect employee feedback and measure
employee engagement. An independent third party manages
this feedback confidentially and provides us with aggregated
information only to preserve the anonymity of employees and
their responses. In 2024, a global survey took place, followed
by local pulses to analyse and address specific topics.

| For more details on the results and actions stemming from 'Your Voice', see section 3.1 'Our employees’.

• Canal Abierto: an anonymous and confidential channel for
employees to report unethical conduct and breaches of the
General code of conduct. This channel also receives reports
from third parties, such as vendors, customers and investors.

| For more details, see section 4.3 'Ethical channels'

• Dialogue with employees’ legal representatives: on top of the
above mechanisms, we believe that employees’ legal
representatives play a key role as a spokesperson for our
workforce. That's why we encourage and maintain permanent,
fluid and direct dialogue, engagement and negotiation with
them through trade unions and works councils. We also
channel discussions on industrial relations through these
representatives in the markets where they exist.
In order that the relationship between the bank and
employees’ legal representatives remains productive and fluid,
we engage with them through:
- Santander's bodies for engagement with employees’ legal
representatives and through formal councils and committees
set up for this purpose;
- Through meetings to address specific matters, direct contact
and information exchange platforms.
The Labor Relations function also facilitates mechanisms for
communication between employees’ legal representatives and
the people they represent and those affiliated to trade unions
according to the regulations and agreements that apply in each
market.
• Customers. The listening process varies according to customer
type:
• Retail customers: the aim is to measure their satisfaction and
experience in each of our core markets through regular Net
Promoter Score (NPS) surveys following customer interactions.
We also run a customer experience benchmark to help us
identify our competitive positioning, with results twice a year.
Both exercises aim to spot areas for improvement that we pull
together in action plans with unit´s management committee
oversight.

| For more details on our complaints handling system, see section 3.3 'Our customers'

• Wholesale customers: we identify needs and areas for
improvement as part of our customer relations and dialogue on
an ad hoc basis. Bankers escalate the insights gain that either
need management or provoke actions to adjust our commercial
strategy.
Customer feedback is collected by customer interaction teams
(customer experience and customer service team, among others)
and fed back into key bank processes overseen by governance
bodies and thus integrated into the 'Think Costumer' pillar of the
strategy.
• Shareholders and investors. We engage with our shareholders
and investors to strengthen ties and offer a value-added
proposition that sets us apart. We use surveys, events, direct
contact and other channels (with digital channels gaining
traction) to enable close dialogue that helps this group
understand the business better and communicate with senior
management.
• Communities. The aim is to understand the needs and challenges
of the communities where we operate by gathering information
from several sources:
• Individuals: the customer experience function runs mass
surveys to learn about how the communities we serve perceive
our actions.
• Non-governmental organizations (NGOs): the Sustainability
and Social Action functions engage in two-way communication
with the leading civil organizations in our markets.
• Under our Environmental, social and climate change risk
(ESCC) policy and the Equator Principles, we conduct analyses
on the environmental and social risks that our operations might
have on our communities.

| For more details, see section' 3.2.3 Environmental, social and climate change management'

2 In line with our principles of transparency, honesty and impartiality, Grupo Santander may only finance political parties on an exceptional and arm's length basis, and with
approval from the Group executive committee. These standards prohibit making monetary or in-kind donations and contributions to elections. Total or partial debt
cancellation for political parties and their affiliates is strictly prohibited. While Grupo Santander may negotiate the terms of any political party debt, the interest rate charged
must never fall below the market rate.
Annual report 2024 25

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Our 2024 engagement in numbers

Employees 83% participation in our Your Voice survey A 4,437 complaints received through ethical channels A 151,726 employees answered the survey based on the total number of employees eligible to participate, i.e. employees who have been with the organization for less than 3 months, long-term absentees, employees without access to the corporate intranet, and employees without access to the corporate intranet are excluded. |  | Customers Over 9.9 million surveys to customers 681,636 complaints received; resolved or under management |  | Shareholders & Investors 9,136 responses by retail shareholders on the perception of Santander as Simple, Personal and Fair 157,632 responses by retail shareholders and institutional investors through quality surveys and studies 229 events with retail shareholders 1,269 interactions with institutional investors ( 109 on ESG matters) |  | Communities 158 interactions with NGO enabled us to gather and address the needs of the communities where we operate and to understand the impact of our activities

Santander also engages with other stakeholders, including
suppliers, ESG ratings agencies, regulators and supervisors,
political parties and authorities:
• Suppliers: we want our value chain to be more sustainable while
increasing the Group’s resilience to environmental and social
risks. We include ESG standards in tenders for certain services
and support vendors in assessments and certification procedures.

| For more details, see section 4.4 Our suppliers

• ESG ratings agencies: the aim is to convey our developments,
assess our progress and spot areas for improvement. In 2024, we
maintained our position in MSCI (AA) and at Carbon disclosure
project (CDP) level A . We scored 17.1 points in Sustainalytics,
remaining in its ‘Low Risk’ category, and reached the C+ category
in ISS.

| CCC
| 100
| D-
| 0

|  |  | Evol.
AAA | AA | =
AA
0 | 19.7 | é
17.1
A | A- | é
A
A+ | C- | 55.6 | é
C+ | 58.5

| 2023 |  | 2024

• Regulators: as part of the policy debate we engage with
regulators (local and European) and international standard
setters on the initiatives that are most important to the bank, our
employees, our customers and the communities we serve.
Santander works with the Basel Committee, the Financial
Stability Board, the European Banking Authority, the European
Central Bank, EU institutions, Banco de España, the Bank of
England, and other key actors to set out the sustainable financing
framework that boosts support for the United Nations
Sustainable Development Goals and the Paris Climate
Agreement targets. As part of this engagement, at the corporate
level, the Group responded to 53 consultations during 2024. In
addition, Brazil’s presidency of the G20 and the COP30 to be held
in Belém in 2025 will provide greater opportunity to work with
stakeholders on common solutions to ramp up the transition in
emerging and developing economies.
• Supervisors: we remain in open dialogue with supervisors so we
can understand their priorities and expectations, and meet all
pertinent regulatory requirements and recommendations.
• Political parties: we also interact with political parties in their
role as policymakers on key topics that affect our sector, broader
society and the environment 2.
• Within our sector: we work closely with industry bodies
(including the Institute of International Finance, the Association
for Financial Markets in Europe and the European Banking
Federation) and think tanks. We work together to find common
ground on issues such as the implementation of the EU
Taxonomy, the framework for sustainability disclosure and
reporting, and ongoing efforts to pinpoint and manage climate-
related risks. We take part in these debates through
consultations, workshops and other channels, and by facilitating
the exchange of views between key stakeholders, in events such
as the International Banking Conference and other events that
Banco Santander organizes every year.
Annual report 2024 26

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Main sustainability initiatives where Santander is a member or participant

Linked to General Sustainability Frameworks and partnerships
| → United Nations Global Compact: We have been part of the Global Compact network since 2022 and a member of the gender equality programme since 2020. We also took part in the 'sustainable suppliers' programme.
| → Santander has been a member of the United Nations Environment Programme Finance Initiative (UNEP FI) since 1992 and a founding member of the Principles for Responsible Banking since its launch in 2019. A Santander representative co-chairs the global management committee and in 2024 took part in a review of the 2030 principles. We are also signatory, through Santander Asset Management and since 2008, in the Principles for Responsible Investment (PRI), which offer a menu of possible actions for incorporating ESG issues into investment practice.
| → World Business Council for Sustainable Development (WBCSD): Having become a WBCSD member in 2015, in 2024 we took part in the Banking for Impact on Climate in Agriculture (B4ICA) initiative, the CFO Network, LEAP project, and other programmes.
| → Equator Principles. Voluntary framework for financial institutions to identify, assess and manage environmental and social risks when financing projects. We have been a signatory since 2009.
| → International Capital Market Association (ICMA). ICMA Principles champion global green, social and sustainability bond (and related) markets to finance progress towards environmental and social sustainability. The Principles were established in 2014 and Santander has been a member since then.
Linked to Sustainability Disclosure
| → International Sustainability Standards Boad (ISSB). Santander joined the IFRS Corporate Champions initiative at the end of 2024, with the aim of strengthening the positioning of the ISSB standards as the global standard for sustainability reporting.
| → Task Force on Climate-Related Financial Disclosures (TCFD). The TCFD, which we support since 2017, has developed a framework to help public companies and other organizations more effectively disclose climate-related risks and opportunities through their existing reporting processes.
Linked to Advocacy Forums
| → Instituto Internacional de Finanzas (IIF): Grupo Santander's Executive Chair is the current IIF Chair and has sat on its board since 2014. The bank participates in several sustainability-related working groups, including the Sustainable Finance Policy Expert Group and the Sustainable Finance Data, Disclosure and Classification Expert Group.
| → European Banking Federation (EBF): Santander is a member of several working groups, such as the ESG risk group, which a Santander director chairs; the Sustainable Finance Steering Committee; and the Chief Sustainability Officers Roundtable.
| → Association for Financial Markets in Europe (AFME). Santander is part of AFME´s Sustainable Finance SteerCo. AFME works with members, policymakers and other stakeholders on a wide range of important priorities including sustainability disclosures, taxonomies, sustainable financing products, sustainability due diligence and carbon markets. Santander is part of AFME´s Sustainable Finance SteerCo.
Additionally, in each of the sections, specific initiatives or collaborations for each topic are mentioned.

| For more details on climate-related initiatives and working groups in which we are participate, see section 2.5.1 'Strategy for engagement with other key stakeholders' in the Transition Plan.

Annual report 2024 27

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1.3 Materiality assessment
Double materiality assessment underpins our sustainability
strategy. For more details, see section 1.1 ‘Sustainability strategy’.
In 2023, we shifted our focus slightly to meet the new
requirements of the EU Corporate Sustainability Reporting
Directive. This report shows the culmination of our work to comply
with this Directive.
The analysis developed in 2024 redefines, in line with the
regulation, the sustainability matters that pose risks to, and
create opportunity for, Santander; and where we can have an
impact on the environment and broader society.
We identified 32 impacts, risks and opportunities (IROs) that form
part of the five sustainability matters that are material to Grupo
Santander: E1) Climate change, S1) Own workforce, S3) Affected
communities, S4) Consumers and end users, and G1) Business
conduct. The table below breaks down the impacts (positive and
negative), risks and opportunities of each matter.

|  | Impact |  | Financial
| Sustainability matters (ESRS) | + | – |  | Risk | Opportunity
ÿ | E1: Climate Change |  |  |  |  |
| E2: Pollution |  |  |  |  |
| E3: Water and marine resources |  |  |  |  |
| E4: Biodiversity and ecosystems |  |  |  |  |
| E5: Resource use & circular economy |  |  |  |  |
ÿ | S1: Own workforce |  |  |  |  |
| S2: Workers in the value chain |  |  |  |  |
ÿ | S3: Affected Communities |  |  |  |  |
ÿ | S4: Consumers & end-users |  |  |  |  |
ÿ | G1: Business conduct |  |  |  |  |

ÿ Material | Thresholds: |  |  |  |  |  |

g | Critical | g | Significant | g | Informative | g | Minimal

As a global, retail and commercial bank, the material IROs relate
mainly to the retail and commercial business (business conduct,
customer practices and safeguarding privacy) and to our scale
(contributing to global challenges such as climate change and
financial inclusion, and managing our 200,000-plus employees).
We conduct this assessment for the entire Group, including our
own operations and our value chain, using the available
information and tools; and by engaging our key stakeholders.
We also conducted a materiality assessment in all our subsidiaries,
the findings of which provided feedback on the Group's materiality,
while the Group's materiality informed local materiality.
The results reflect a short to medium-term time horizon (~1-5
years) for which most of the information is available. However, a
qualitative analysis suggests that if we used a long-term horizon,
there would be no changes to the results and IROs that are
material.
The materiality assessment is connected to key risk management
processes across the Group. It provides input for the top and
emerging risks exercise and is connected to other internal risk
exercises.

| For more details, see section 2.3 'Embedding ESG in risk management'

The responsible banking, sustainability and cultural committee
approved the bank’s double materiality assessment, material
impacts, risks and opportunities, and sustainability strategy.
Below are details of the material IROs under each sustainability
matter. In this Sustainability statement, we outline how we
manage each one through policies, actions, metrics and targets (as
required by the Corporate Sustainability Reporting Directive-CSRD)
in several sections under this chapter.

| For more details, see SN 3. 'Materiality assessment methodology'

Annual report 2024 28

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E1 | Climate change I+ Contribution to protecting the environment by driving an increase in the use of renewable energy and other low-carbon technologies. I+ Contribution to reducing the Group’s scope 1 and 2 greenhouse gas emissions. I- Adverse impact on climate and the environment due to the bank’s financing of, or investment in, certain non-sustainable assets and activities. O Growth in the financing of renewable energy and other energy transition solutions. O Revenue growth by providing our customers with sustainable solutions in such sectors as construction, mobility or agriculture. R Reputational risk based on the perception of bank’ progress with climate-related policies and objectives.
S1 | Own workforce I+ Promote the health, well-being and security of our employees in a safe and inclusive workplace; facilitate a positive work-life balance through flexible working when possible. I+ Promote a workforce that reflects the society we live in and encourages collaboration and the same opportunities for all our employees, irrespective of personal characteristics and in compliance with the law. I+ Promote continuous career development and personal growth through learning and development programmes. I+ Promote the general well-being of employees and provide appropriate remuneration under equal conditions based on merit and market rates. I- Harm employees through unlawful discriminatory conduct, inadequate working conditions, harassment or corruption. R Potential risk of conflict with employees based on excessive working hours, corruption or the infringement of their rights.
S3 | Affected communities I+ Drive economic growth and job creation in the regions where we operate and provide credit to people and businesses. I+ Contribution to sustainable development through financing and investment that promotes sustainable performance in companies, addresses societal challenges, mitigates a specific issue, or pursues better societal outcomes. I+ Contribution to education, employability and entrepreneurship, as well as to community development through support programmes. I- Finance activities (in any customer segment) that breach the bank’s policies and jeopardize the well-being of present and future generations. I- Potentially negative impact on the environment or society by failing to sufficiently involve appropriate stakeholders or use suitable customer identification and management mechanisms when providing finance to a customer or project.
S4 | Consumers and end users I+ Positive impact on customers due to the bank’s offer of products and services that adapt to their needs and expectations and promote financial inclusion and health. I+ Education on, and awareness of, cyber security to understand potential threats and ways to repel them. I- Negative impact on the customer if they do not have access to complaints channels or if, after making a complaint, the bank fails to take the necessary action. I- Negative impact on the customer if the bank fails to provide sufficient information on the product or service they are signing up for. I- Potential infringement of customers’, employees’ or shareholders’ rights due to a lack of appropriate technical or organizational measures to protect their personal data according to law and the practices set by the Group. I- Negative impact on the customer by failing to guarantee access to, or the use of, products and services that may present certain obstacles or weak spots. R Potential losses due to fines or a reduction in the number of customers because of a failure to detect or respond effectively to breaches of privacy. R Potential losses due to claims or a reduction in the number of customers because of substandard customer practices throughout their life cycle.

Annual report 2024 29

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G1 | Business conduct I+ Act responsibly and consider investors’ interests and the impact on employees, broader society and the environment; pay taxes to support the distribution of wealth. I+ Protect the confidentiality of users of the bank’s ethical channel and have an effective reporting system in place that follows robust principles and procedures. I+ Promote responsible practices among vendors; engage with them, assess their ESG performance and give them recommendations and tools to improve. I- Negative impact on the environment or broader society by failing to implement measures to resolve incidents through complaints or reporting channels or due to a lack of continuous improvement actions. I- Harm broader society through bribery or corruption. R Potential risk from failing to ensure the operational resilience of the value chain by assessing vendors’ solvency, reputation and compliance with the law. R Risk stemming from improper conduct that makes illicit funds or assets appear legitimate and, therefore, facilitates illegal activity or to benefit from it.

Key: I+ Positive impact I- Negative impact R Risk O Opportunity
There are five sustainability topics that we consider non-material,
given none of the impacts, risks and opportunities connected to
them reach the materiality threshold: pollution, water and marine
resources, biodiversity and ecosystems, resource and circular
economy, and workers in the value chain.
However, we address aspects of nature and biodiversity that are
most closely related to climate objectives within our transition
plan.

| For more information, see section 2.3.5 'Our approach to nature and biodiversity'.

1.4 Sustainability governance
We manage and review progress with sustainability at the highest
level of the business. The board of directors is responsible, among
other things, for approving the sustainability agenda and setting
the sustainability strategy.
The responsible banking, sustainability and cultural committee
proposes and oversees the development and implementation of
the Group's sustainability strategy and policies, in support of the
board of directors.
Other board committees also analyse specific sustainability topics.
The audit committee is responsible for supervising and reviewing
the financial and non-financial information process, as well as the
internal control systems, to meet the most demanding
international standards and complies with the guidelines
established by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
The overseeing of material sustainability issues, as well as the
main lines of action for their management, are periodically
reviewed through the bodies shown below, which together form
the governance of the function:
Annual report 2024 30

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| Board of directors Prepares annual accounts and management report, which shall include sustainability statement, and is presentation to the general shareholders' meeting |
| é |  | é |  | é é |
| Risk supervision, regulation and compliance committee A Reviews risk appetite statement proposals prior to board approval |  | Audit committee Reviews company and Group financial statements, monitor legal requirements compliance and assesses information and internal control systems |  | Responsible banking, sustainability and culture committee Assists the board in fulfilling its oversight of the responsible business strategy and sustainability issues (company and Group) |

| é |  |  | é |  |  | é |
Executive & management level (main bodies & functions) |
| Risk control committee |  | Accounting & financial management information corporate committee Financial accounting & control function |  | Sustainability, risk, reporting and ESG businesses function |

Defence lines: |
| 1 st line of defence (Business owners, general accounting and management and sustainability function) |  | 2 nd line of defence (Risk & compliance) |  | 3 rd line of defence (Internal Audit) |

¢ Overall responsibility ¢ Supervisory oversight é Reporting é Risk é Impact é Opportunities
A. The BRC works with the RBSCC (Responsible Banking, Sustainability and Cultural Committee) to review ESG-related conduct risk, data protection risk, customer vulnerability,
reputational issues, risk policies and how business units adopted these policies.

| For more details on sustainability governance, see note 'SN 2. Sustainability governance' .

1.4.1 Integration of sustainability-related
performance in incentive schemes
Grupo Santander’s remuneration policy reflects our strategic and
long-term sustainability objectives. Variable pay is based on pre-
determined, specific and quantifiable financial, sustainability-based
and value-creation targets.

| For more details, see section 6.1 'Remuneration policy' in the Corporate Governance chapter.

Our long-term incentives (LTI) scheme applies to our top 36 Groups'
executives, including the Executive Chair and the CEO.
Sustainability has formed part of the last three LTI schemes, with a
20% weighting. The proposal for 2025-2027 will be subject to vote
at the Annual General Meeting in 2025.

| For more details, see section 6.3 'Remuneration of directors for executive duties' in the Corporate Governance chapter.

Short-term variable remuneration has a qualitative and quantitative
component. Under the qualitative component, sustainability has
had a ±5% weighting in the Group, global businesses and
subsidiaries since 2020. Short-term incentives apply to our top 236
Groups' executives and global and subsidiary corporate centre
employees.
In 2024, 8% of the variable remuneration received by the
Chairwoman and the CEO has been linked to sustainability, while
2% of their total remuneration has been linked to climate actions.
The responsible banking, sustainability and cultural committee,
remuneration committee, and board of directors approve these ESG
incentive schemes.
The proposed parameters to assess ESG performance aim to reward
progress with our main ESG metrics and embedding ESG in our
management, as shown below:
3 For instance: the Universal Declaration of Human Rights, the International Labour Organisation Declaration on Fundamental Principles and Rights at Work, the United Nations
Guiding Principles on Business and Human Rights, the OECD (Organization for Economic Cooperation and Development) Due Diligence Guidance for Responsible Business
Conduct, and others.
Annual report 2024 31

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Inclusive Culture | Progress with inclusive culture and other initiatives such as accessibility.
Financial inclusion | Progress with financial inclusion targets and other key initiatives in the social agenda (financial education, community investment, etc.).
Sustainable finance | Progress with sustainable finance and socially responsible investment.
Climate | Progress with our transition plan and the key levers to fulfil our net zero ambition.
Governance and cross-cutting matters | Conducting our double materiality assessment, implementing sustainability policies, and enhancing data efficiency and quality.

1.4.2 Human rights due diligence
We strive to foster that our operations uphold and protect the
human rights of our stakeholders in the countries where we
operate.
The CSRD requires the findings of human rights due diligence
exercises to inform the double materiality assessment.
Human rights are integrated into management and governance
based on the process type, focusing on monitoring adverse impacts
and implementing measures, such as:
• looking after our employees’ health and promoting decent
employment, the preservation of freedom of association and
collective bargaining and the prohibition of slavery and child
labour.

| For more details, see section 3.1 'Our employees'

• protecting our customers’ human rights through responsible
business practices and the protection of their data.

| For more details, see section 3.3 'Our customers'

• assessing the human rights impact on transactions with
customers through environmental, social and climate change
(ESCC) analysis.

| For more details, see section 2. 'Our climate transition plan'

• embedding environmental and social aspects, including human
rights, in our supply chain management.

| For more details, see section 4. 'Business conduct'

Our board-approved Responsible banking and sustainability policy
includes our pledge to uphold human rights.
Canal Abierto is a key tool to identify, manage and resolve
potential human rights-related incidents or violations to protect
our customers, employees, suppliers and the communities we
serve.

| For more details, see section 4.3 'Ethical channels'

In 2024, we conducted a comprehensive human rights due
diligence exercise to: (i) assess the effectiveness of current due
diligence policies; (ii) identify and assess actual and potential
adverse impacts based on their severity and probability; and (iii)
assess the suitability of our communications channels and control
measures to prevent, mitigate and remedy adverse impacts.
This exercise followed international frameworks and directives and
best market practice 3 and covered all of our global businesses’
units and activities.
The findings of the human rights due diligence exercise are
embedded into the strategy and governance, informing the double
materiality assessment. Additionally, we engaged stakeholders as
part of our analysis of these findings.

| For further detail regarding the 'Materiality assessment methodology', see Sustainability Note 3

For more details on our human rights due diligence, visit the
website santander.com/en/our-approach/policies
Annual report 2024 32

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2. OUR CLIMATE
TRANSITION PLAN
(Environmental information)
2.1 Strategy
2.1.1 Our approach
Santander considers climate a material topic, having identified impacts, risks and opportunities in the double materiality assessment. Per
legal requirements, below we disclose our transition plan, based on three pillars. The purpose of each pillar is to support our customers and
the communities we serve in their transition objectives; assess our customers’ climate-related risks to manage the impact on their business
and on our operations; and make progress with the alignment of our portfolios:
1
Supporting our customers in
their transition goals

Supporting our customers in pursuing
their transition to a sustainable economy.
Having achieved our target of raising or
facilitating EUR 120 bn in green finance
between 2019 and 2025 18 months
early, we’re making headway with our
next milestone of achieving EUR 220 bn
by 2030. We are offering our customers
guidance, advice and specific business
solutions; and a wide range of products
to invest in according to their
sustainability preferences, with the
target of reaching EUR 100 bn assets
under management (AuM) in Socially
Responsible Investments (SRI) by 2025.
2
Embedding climate
in risk management

Embedding climate and environmental
aspects in risk management implies
adopting a risk-based approach to those
factors, focusing on the most material
sectors. We consider the risks stemming
from climate and environmental factors
in the overall risk management cycle,
including a materiality assessment that
informs the double materiality
assessment and our sustainability
strategy.
3
Aiming to align our activity with
the Paris Agreement Goals

Aiming to align our portfolio with the
Paris Agreement goals to help limit
global warming. We are setting sector
portfolio alignment targets for 2030 in
high-emissions portfolios. The progress
on these targets is expected to reflect the
progress of the economies we serve. We
currently have seven targets in five
sectors and alignment targets for our
asset management activity.
Meanwhile, we continue to reduce our
impact on the environment by
implementing efficiency measures in our
own operations and sourcing all our
electricity from renewable sources
by 2025.
To achieve this, we engage with our different stakeholders:
• Customers and investors: developing products/services adapted
to their needs; participating in a collaborative network of
institutions to create financing opportunities; and developing
assessment tools to better manage performance and monitor
progress towards their transition goals.
• Key climate actors: participating in local and international
organizations, alliances and working groups to progress with
global goals.
• Authorities: participating in debates regarding the climate
agenda with regulators, policy makers and supervisors on the
developments that are most relevant to the bank, its employees,
customers and the communities in which we operate.
• Communities: supporting a number of local initiatives to tackle
climate change, protect biodiversity, and generate positive social
impact.
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2.1.2 Our ambition
We continue working towards our ambition of net zero carbon
emissions by 2050 by progressively setting specific actions to
make headway with our three-pillar strategy.
Incentive policies and frameworks are key to driving the energy
transition. The challenge goes beyond increasing the flow of
capital from the regulated financial sector to funding the energy
transition. We need to scale transition activity and the demand for
solutions, which will require better risk-profitability profiles.
Achieving climate objectives depends largely on the
macroeconomic landscape and public policy.
2.1.3 Our objectives

| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |  |  | 2025/2030 target
Green finance raised and facilitated (accumulated EUR bn) A | 19.0 | 33.8 | 65.7 | 94.5 | 115.3 | 139.4 |  |  | 120 bn by 2025 220 bn by 2030
AuM in Socially Responsible Investments (accumulated EUR bn) |  |  | 27.1 | 53.2 | 67.7 | 88.8 |  |  | 100 bn by 2025
Thermal coal-related power & mining phase out (EUR bn) |  |  | 7.0 | 5.9 | 4.9 | 4.8 |  |  | 0 by 2030
Emissions 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 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 grCO 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% |  |  | 100% by 2025

In 2024:
→ we continued progressing with aligning key portfolios, including
adding the disclosure of emissions for our mortgages portfolio in
Spain and our commercial real estate portfolio in Spain and the
UK;
→ we continued managing our own operations emissions from
scopes 1 and 2, setting new reductions plans and offsetting
remaining ones; and we kept our offices and buildings in our
core markets free of single-use plastics to meet our target.
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.
For more details of the scope of targets, see section 2.1.4.
Annual report 2024 34

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2.1.4 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:

| Net zero ambition and first alignment targets (thermal coal, power generation and Santander Asset Management- SAM) |  |  |  | Alignment targets disclosed for oil & gas, steel and aviation |  |  |  | In 2024 we achieved our 2025 target to raise or facilitate EUR 120 billion in green finance 18 months early Alignment targets disclosed for automotive sectors (manufacturing and lending) |  |  |  | Financed emissions disclosed for residential mortgages (Spain) and commercial real estate (Spain and UK) Use 100% of electricity from renewable sources A in all Santander buildings |  |  |  | SAM target to halve net emissions for 50% of in- scope AuM B Alignment targets for power generation, oil & gas, steel, aviation, auto manufacturing and auto lending |
| 2021 |  |  |  | 2022 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2030 |
| Cut unnecessary single-use plastics |  |  |  | Development of first Sustainable Finance Classification System, including transition finance criteria |  |  |  | Financed emissions disclosed for residential Mortgages (UK) and Agriculture (Brazil) |  |  |  | EUR 100 billion in Socially Responsible Investment AuM |  |  |  | Raise or facilitate EUR 220 billion in green finance from 2019 Thermal coal-related power & mining phase out |

A. In countries where we can verify electricity from renewable sources at Banco Santander properties. Target considers the 10 core markets in which we operate.
B. 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
Annual report 2024 35

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2.2 Supporting our customers in their transition goals
In this section we cover how Santander manages the following
IRO:

| I+ | Contribution to protecting the environment by driving an increase in the use of renewable energy and other low-carbon technologies |
| O | Growth in the financing of renewable energy and other energy transition solutions |
| O | Revenue growth by providing our customers with sustainable solutions in such sectors as construction, mobility or agriculture. |

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.
As a large financial institution, we have an opportunity to support
our customers in their ambition to transition to low carbon
business models. To this end, we continue enhancing our
sustainable finance and advisory proposition, and financing in our
global businesses.
To achieve this, we are:
1. growing the green finance business, which entails drawing up a
green finance strategy for the Group's businesses and delivering
a strong value proposition for our customers;
2. building the infrastructure that support green finance across the
Group. This means implementing the sustainable finance and
investment classification system (SFICS); strengthening the
controls to assess and manage greenwashing risk; and
executing the data strategy to measure and monitor green
finance results; and
3. deploying well-trained commercial teams to capture
opportunity.
In Corporate & Investment Banking (CIB), we have already reached
EUR 139 billion in green finance raised and facilitated since 2019,
achieving our EUR 120 billion target 18 months early and are
working towards reaching EUR 220 billion by 2030.
Climate opportunities
Working with customers to support their transition objectives and
carbon reduction emissions goals is key to progressing towards a
low-carbon economy. To do this we identify business opportunities
for transition financing assessing key sectors, working closely with
our clients and with the knowledge of our sustainability experts.
These opportunities inform our materiality assessment.
In addition, the Group calculates the ratio of green assets aligned
with the European Taxonomy. In 2024, it amounts to 3.28% (vs.
2.6% in 2023). The volume of assets as at December 2024 aligned
with the European taxonomy for mortgages is EUR 28.1 bn and
auto is EUR 8.8 bn. For more details, see SN 5. European
Taxonomy.
Also, from investment through our assets management business
SAM, the top three climate-related opportunities are:
• new climate solutions involving products and services that boost
diversification, competitive advantage and revenue;
• lower-emission energy sources that benefit from less exposure
to Greenhouse Gases (GHG) emissions, lower costs, policy
incentives; and
• efficient production and distribution of resources to lower
operational costs and raise both production capacity and the
value of fixed assets.
Transition finance and just transition
The regulatory framework must support growth, which is key to a
stable and orderly transition.
We want to help achieve sustainable development and pledge to
play an active role in supporting the green transition. It is vital that
the transition is just and inclusive, taking into account regional and
sector specificities to avoid isolating communities and stranding
assets.
We aim to embed and promote the just transition through our
engagement approach, our risk management policies and
processes, and our sustainable and investment products. We
consider this approach when devising our policies and reviewing
our SFICS (Sustainable Finance and Investment Classification
System), which covers activities aimed at addressing or mitigating
social and environmental issues; bringing focus on specific matters
such as protecting the Amazon biome (given our operations in
Brazil) and helping local communities; and supporting initiatives
like the Just Transition Alliance, led by the Grantham Research
Institute at the London School of Economics.
2.2.1 Corporate and investment banking (CIB)
CIB has raised and mobilized globally EUR 139.4 billion in green
finance between 2019 and December 2024. This target focuses on
green use of proceeds, such as renewable energy, across products
where well-recognized public information is available.
GREEN FINANCE VOLUMES FROM 2019 TO 2024
Raised or facilitated. EUR bn.

139.4 |  | 220
2019 |  | 2030

Annual report 2024 36

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2024 GREEN FINANCE VOLUMES
SPLIT BY PRODUCT
Raised or facilitated. EUR bn.
DCM (Debt capital markets); M&A (Mergers and Acquisitions)
Information obtained from public sources, such as Infralogic, TXF, Bloomberg or
Mergermarket league tables. All roles undertaken by Banco Santander in the
same project are accounted for. Other sustainable finance components, such as
financial inclusion and entrepreneurship, are excluded. Green Finance raised and
facilitated is not a synonym of EU Taxonomy. Information from League Tables
extracted by January 15 th, 2025, latest.
Our sustainable finance proposition includes expertise in
renewable energies, as demonstrated by our long-standing global
leadership in this field. We also provide a range of sustainable
finance structuring solutions and advice across multiple products
and geographies. Our client climate tiering approach is designed to
aid in the identification of customer-level priority areas and provide
transition benchmarking to support our customers in financing
their transition. Our corporate finance advisory proposition, led by
our global team of experts in green and transition technologies,
enables us to provide bespoke strategic and corporate finance
advice on opportunities to accelerate the adoption of low-carbon
technologies to meet their sustainability ambitions. For more
details, see below select case studies that demonstrate how we
support our customers in the energy transition.
During 2024, Santander remained active in corporate finance
transactions in the renewable energy sector across different
technologies and geographies. In Europe, CIB supported Enel in a
landmark transaction which is among the largest deals closed in
the region: the sale of a 49% stake in a 2GW portfolio of
operational solar PV assets in Spain to Masdar. Santander also
supported Canadian Solar in the sale of a minority stake in its
global development platform Recurrent Energy to BlackRock in
March 2024 with a project pipeline totalling 26GW of solar PV and
56 GWh of Battery Energy Storage Systems.
Santander also acted as Financial Adviser to Sonnedix to raise a
EUR 2.5 billion debt package to refinance 1.1 GW portfolio of
renewable energy assets in Spain, Italy, and France, with the ability
to expand the facility with new assets across Europe and the UK.
The financing package provided an innovative blend of project
finance-like debt structuring with more corporate-style
documentation flexibility.
Santander acted as Sole Financial Advisor and LC (Letter of Credit)
Provider in 3.16 billion Brazilian reals (BRL) long term financing to
the renewable energy Babilonia Central project in Brazil. The
project, controlled by a joint-venture between ArcelorMittal Brasil
(55%) and Casa dos Ventos (45%), will have a capacity of 554 MW
of renewable energy to be used by ArcelorMittal to align its steel
operations in Brasil (estimated 40% of its electricity needs by
2030).
In electric mobility, Santander acted as financial advisor, sole
underwriter, and green loan coordinator in the concession of a EUR
225 million green loan to Zunder to help their expansion plan that
aims to deploy more than 3,000 ultra-fast charging stations across
Europe.
In Debt Capital Markets, Santander helped place several landmark
sustainability labelled transactions, including a EUR 1 billion, six-
year inaugural green bond issuance by Saint-Gobain, a global
leader in light and sustainable construction; a EUR 1 billion, dual-
tranche green deal for A.P. Møller-Mærsk, an integrated logistics
company; and a EUR 750 million, nine-year debut sustainability-
linked bond issued by Gatwick Airport, with targets related to their
CO 2 emissions reduction. Santander was recognized as ESG Bond
House of the Year at the 2024 Global Banking & Markets Latin
America Awards, which also selected COFIDE’s USD 300 million,
five-year social bond as ESG Bond Deal of the Year, where
Santander acted as active joint bookrunner and ESG Structurer.
Notable ESG deals in Latin America also include our sole
sustainability structurer and sole bookrunner role for the Republic
of Guatemala, which issued a USD 800 million, 12.5-year inaugural
sustainability bond; a bookrunner position for the Republic of
Honduras’ USD 700 million, 10-year debut sustainability bond; and
our sole ESG structurer role in the first Mexican taxonomy-aligned
bond issuance from Acueducto Cuchillo 2 (6.6 billion Mexican
pesos senior unsecured sustainability bond).
In Export Finance, we participated as a Pathfinder, Mandated Lead
Arranger and Lender in EUR 1.3 billion green financing partially
covered by BPI Assurance Export for Verkor. These funds are
allocated to Verkor's first battery gigafactory in Dunkirk, with an
initial production capacity of 16Gwh/year.
We also acted as a Senior Mandated Lead Arranger (SMLA) for the
construction of H2GS Boden AB’s fully integrated, digitalized and
automated greenfield steel plant in the North of Sweden for a total
debt of EUR 3.3 billion. Euler Hermes and Riksgalden, the German
and Swedish ECAs (Export Credit Agencies), participated in this
financing by covering part of the debt. The steel-making process
will be powered by hydrogen produced from renewable energy,
making it the first European large-scale steel producer based on
fossil-free manufacturing. CIB won the PFI Sustainability Deal of
the Year for this transaction, as well as 12 other awards, including
Europe's Bank of the year.
In Trade Finance, we participated in a EUR 1.2 billion green
guarantee line with coverage from Spanish export credit agency
Cesce for Siemens Gamesa. The technical guarantees issued under
this line will support Siemens Gamesa in its wind projects
worldwide.
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.
Santander was also awarded both Best Provider of Sustainable
Finance Solutions in Trade Finance and Best Sustainable Supply
Chain Finance Program by Global Finance in 2024.
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Financing renewable energy
Grupo Santander has been a leader in renewable energy finance
for more than 10 years. 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 according to
Infralogic:

Rank | Loan Provider | Vol. (EUR million) | No. transactions | Market Share
1 | Bank 1 | 8,009 | 79 | 4.95%
2 | Banco 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%

Peers are BBVA, BNP Paribas, Citi, Crédit Agricole, HSBC, ING, Itaú, Scotia Bank and
UniCredit. Data extracted by January 15 th, 2025, latest.
T he greenfield renewable energy projects that we financed or
advised on in 2024 have a total installed capacity of 10.2 GW. We
also helped expand, enhance and sustain renewable energy
brownfield projects that have a total installed capacity of 28.2 GW.
The greenfield renewable energy projects Santander participated
as financier or advisor in 2024 can power 6.5 million households
per year.
2.2.2 Retail and Commercial Banking
In 2024, Retail and Commercial Banking continued to enhance its
proposition with solutions that help customers transition to a low-
carbon economy, most notably in such sectors as real estate,
mobility and agriculture, as well as in the circular economy (water
and waste management). These solutions include sustainability-
linked loans (SLL) that complement the products that help
customers align production to the transition.
Managing greenwashing risk is one of the Group’s priorities,
particularly through compliance with operational guidelines for
green finance teams and meeting supervisors’ expectations on
climate matters. ESG certification forums review products and
transactions to validate that they are consistent with the SFICS
before labelling them as green. The SFICS is an automated tool
that we implemented in our core markets to provide traceability of
decisions and supporting documents.
In addition, we created Green Product Inventories in our core
markets where we have implemented standards and established
robust control and approval procedures.
These were the core activities we performed in 2024:
• Santander España launched the “Eficiencia Energética” loan for
owners associations looking to fund building renovations or
boost energy efficiency. This will enable our customers to save
on energy bills while helping the environment.
Moreover, through the new Recovery and Resilience Mechanism
line of credit, we promote and boost access to sustainable
finance mainly for electric vehicles, renewable energy, the
circular economy and social housing development.
• Banco Santander Brasil continue to broaden its sustainable
finance proposition, especially in renewable energy, agriculture
and electric mobility. We worked with Holu Solar to create
Energía Plus, a platform to help retail customers and SMEs
install solar panels.
• We also launched FIT Energía services for retail and SME
customers. FIT Energía is a platform that connects consumers
with producers of renewable energy to encourage the use of
cleaner and cheaper energy.
• Santander Polska continues to help SME and corporate
customers obtain sustainable finance through the “My electric
car” programme and a green loan backed by Bank Gospodarstwa
Krajowego (BGK). We also launched the Santander New Energy
platform, a tool to educate and support SMEs in boosting the
efficiency of their production models.
• Santander UK signed an agreement with Scottish Power to offer
customers solar panels and heat pumps. Moreover, we also
entered into partnership with Octopus Energy to offer customers
discount on solar panels and batteries.
• Santander Portugal joined interbank services association SIBS,
which developed a platform to help SMEs centralize, report on
and share sustainability data, as well as to simplify disclosures
on ESG requirements.
• Santander Argentina launched Tienda GRO, an online
marketplace to help retail customers finance sustainable
products. We also increased the technical and financial solutions
for renewable energy projects available to retail customers
through our partnerships with leading solar energy providers.
• Santander Chile signed its first real estate loan (USD 25 million)
based on the Edge Advanced certificate and under its partnership
with the International Finance Corporation (IFC). The bank
continues to promote these deals to bolster sustainable
development in Chile. We also entered into an agreement with
Tesla to broaden our clean mobility proposition.
• In July, Santander Uruguay and Buquebus announced the
financing of the world’s biggest electric ferry, which will connect
Buenos Aires (Argentina) with Colonia del Sacramento (Uruguay),
through a USD 107 million loan granted by the bank and partially
backed (USD 67 million) by the IFC. This loan saw Santander and
the IFC close the world’s first electric maritime transport deal.
• In October, Banco Santander Perú financed foreign trade deals
worth USD 14 million for Exportadora Frutícola del Sur (Grupo
Athos), a Peru-based company that holds the Global Gap
certificate.
• Santander Colombia was the main lender in Jungheinrich
Colombia’s (German logistics multinational) acquisition of
electric fork-lift trucks. We also signed an agreement with Enel X
to offer our customers solar panel solutions.
Annual report 2024 38

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Working with multilateral institutions
Santander continues to work on aligning sales activities with the
objectives and opportunities that multilateral development banks
(MDBs) drive in the countries where the Group operates.
In 2024, Santander España and Portugal took part in a Green
Gateway Advisory Programme coordinated by the Invest EU
Advisory Hub to boost the role of banks in the transition to a low-
carbon, resilient economy. The purpose of this programme, which
EIB (European Investment Bank) and PwC advisors lead on, was to
assess Santander's, the EIB’s, and the EIF’s eligibility criteria,
uncover the key trends and opportunities in the sustainable finance
market, and explore core MDB tools that the Group can use to drive
green production among customers.
As part of a synthetic securitization with the EIB, Santander
Portugal agreed a line of credit for residential and commercial real
estate transactions of new buildings with almost zero emissions
and renovation of existing homes according to sustainable
standards. This enables us to offer significant discount on the loan
spread of customers whose transactions meet EIB’ sustainability
standards.
2.2.3 Wealth Management & Insurance
(Wealth)
Most socially responsible investment (SRI) products with ESG
aspects (registered as Article 8 SFDR-Sustainable Finance
Disclosure Regulation) that Santander Asset Management (SAM)
manages have a sustainable investment objective ranging from 1%
to 50%. Some investment products registered as Article 9 have a
100% sustainable investment objective (excluding cash and
derivatives).
As part of our SRI product range, we have thematic funds that focus
on renewable energy (Santander Iberia Renewable Energy), social
objectives (Santander Prosperity), agriculture (Atgro), and climate
(Santander GO Global Environmental Solutions, Santander
Innoenergy Climate, and Santander Sostenible Bonos).
The Santander Sostenible Bonos fund, launched in 2019, was a
trailblazer in Spain for investing in green bonds to finance clean
energy, emissions reduction and other green initiatives. The fund
also invests in social, climate change, environmental and other
sustainable bonds.
In private markets, Santander Alternative Investments (SAI) offers
two solutions to address climate change: Santander Iberia
Renewable Energy, a private equity strategy that invests in solar
and wind energy projects in Spain and Portugal; and Santander
Innoenergy Climate Fund, a venture capital strategy that invests in
climate technology startups that work on renewable energy, smart
grids, energy efficiency, storage systems, green energy batteries,
mobility and the circular economy.
SAM has an advisory mandate for LA Green, a blended finance fund
to boost the SME green bond market in Latin America, mobilize
large-scale capital and make a positive contribution to society and
the environment.
Moreover, SAM’s SRI products include solidarity funds that donate
a portion of their fees to NGOs. In 2024, we boosted our
proposition by making changes to two equity funds: Santander
Sostenible Bonos and Santander Sostenible Renta Fija Ahorro, and
two profiled funds: Santander Sostenible Crecimiento and
Santander Sostenible Evolución a solidarios. These funds donated
to several NGOs to educate young people at risk of exclusion and
help vulnerable women search for jobs, among other causes. Our
Santander Responsabilidad Solidario fund won 'Best solidarity
fund' at the Expansión-Allfunds Awards.

| For more details on Socially responsible investment, see section 5. 2 'Responsible investment and social finance'.

2.2.4 Digital Consumer Bank (Consumer)
At Digital Consumer Bank, we have the opportunity to help our
customers in their transition to more sustainable mobility and a
low-carbon economy. Enhancing our sustainable finance
proposition is key to achieving our climate transition targets. We
split this proposition into auto and non-auto.
Auto
Santander Consumer Finance (SCF) is Europe’s leading auto lender.
Our ambition is to boost our sustainable finance proposition while
remaining number one. Our leadership enabled us to support the
green transition with EUR 6.8 billion in finance for electric vehicles
and reach a market share of 12% in Europe, as well as contributing
to the alignment of our auto lending portfolio and 2030 target in
Europe.
EU regulation is carving out the path for the automobile industry to
align through two key measures:
• Emissions targets for manufacturers in relation to new vehicles
sold in a year, with progressive, more restrictive targets for
passenger vehicles of 95gCO 2/km in 2020-2024 down to
49.5gCO 2/km in 2030-2034. The penalty for a failure to meet
these targets will amount to EUR 95 for each CO 2 g/km of excess
per vehicle sold. Most manufacturers in Europe are currently
above this threshold, which could lead to penalties across the
industry or the need to restrict sales of combustion-engine
vehicles, but also establishing commercial policies to encourage
the sale of low-emission vehicles, or the creation of pools with
other brands.
• Prohibition to sell combustion-engine vehicles (unless powered
by e-fuels) from 2035.
In 2024, hybrid vehicles saw the highest growth in sales in Europe,
with an increase in market share of 31.4%. This suggests only a
partial shift in consumers’ mindset towards more sustainable
mobility, with perceived barriers to electric vehicles remaining
(largely due to a lack of charging infrastructure).
For the first time in several years, electric vehicle registrations fell
in Europe in 2024. An end to electric vehicle subsidies in Germany
triggered a 27.4% drop in sales compared to 2023. Markets where
policy measures have been discontinued have seen electric
vehicles become less popular, which once again highlights the link
between the sale of these vehicles and government aid.
SCF continued increasing electric vehicle lending, with a market
share in Europe of 12% (above the total Auto market share off 8%).
This further reflects SCF’s leadership in the electric vehicle market.
In 2024, SCF financed 243,315 vehicles (17% of its total business)
worth EUR 6.8 billion (13% of the total Auto portfolio). Electric
vehicles account for 24% of SCF’s new car business (number of
agreements), which outlines its success in this area.
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This progress has been helped by signing new financing
agreements with electric vehicle manufacturers; and extending
partnerships with traditional manufacturers that have set a
roadmap and strategic plan to electrify their fleet (and who,
therefore, are showing a solid objective to the sustainable mobility
transition).
SCF has also come up with innovative, holistic financing solutions
to aid customers’ energy transition, such as home bundles that
include charging points and solar panels.
We will continue working on building partnerships with new
electric vehicle manufacturers that enter the European market as
well as with startups that show vast potential in terms of new
sustainable mobility ideas such as battery swapping.
Nonetheless, the effectiveness of all these measures in the
medium and long term and SCF’s growth in electric vehicle lending
will depend on external factors that include regulation; the
technological developments needed to reduce production costs
and ensure access to key materials to manufacture green vehicles;
the infrastructure to expand capacity and boost efficiency; and
customer demand and market trends.
Non-auto
On top of Santander Consumer Finance’s leadership in auto
lending, it is also a reference in Europe in other consumer finance
sectors, with prominent partnerships and a presence at over
75,000 points of sale throughout the continent.
This vast footprint requires a strong social and environmental
objective to drive a more sustainable economy. With specific,
measurable actions, SCF is working on a green finance model that
promotes environmentally-friendly projects and products for
responsible consumption.
Our sustainable finance value proposition for the Consumer
business covers these sectors:
• Real estate: Solar panel installation, upgrade to sustainable
home heating and cooling systems, and energy efficient devices.
• Sustainable mobility: Electric vehicle charging points, emission-
free vehicles such as bicycles and scooters, and conversions of
combustion engines to less polluting alternatives such as liquid
natural gas and hydrogen.
• Other activities: Sustainable fashion, second-hand clothes, used
mobile phone buybacks and the issue of cards made of
sustainable materials (recycled PVC/PLA) as part of the circular
economy.
Our value proposition is also complemented with financing
programmes for education so that students can access the tools
they need to achieve greater inclusion.
We run other initiatives such as “Hazte ECO” (SCF España) where
we invite customers to join projects to protect the environment
when they use their cards. SCF contributes 1% of purchases to
these projects and makes twice-yearly donations to Fundación
Global Nature to help restore Spain’s wetlands.
The EUR 155 million in green finance disbursed by the Consumer
units in 2024 is a key sign of our objective through this value
proposition.
However, consumers continue to face several obstacles such as:
• Solar panels: A product with a specific shelf life (10-15 years)
requires significant investment and a lengthy repayment plan,
which coupled with more stable electricity prices has caused
customers’ appetite to wane.
• Electric bicycles: Electric bicycles are growing in popularity in
Europe, especially in crowded cities, where they are a practical
alternative to passenger cars. Despite being cheaper than electric
vehicles, these bicycles are expensive and require significant
investment (depending on the model).
The high level of investment that most sustainable initiatives
require government subsidies. Lack of such subsidies and
bureaucratic obstacles to aid has an impact on customer appetite.
2.2.5 Payments
In 2024, 84% of the cards we acquired (39 million) were made
from sustainable materials (recycled PVC/PLA) and we have
continued to make progress in providing solutions to our
customers to calculate their carbon footprint based on the
payments they make with their cards, as well as initiatives to
offset it.
Annual report 2024 40

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2.3 Embedding ESG in risk management
ESG factors risk management
Due to our ESG strategy, the scrutiny from stakeholders and the
regulatory, reporting and disclosure requirements, we continue to
work on embedding and monitoring ESG aspects in risk
management. We consider ESG risk factors, especially climate-
related and environmental, cross-cutting and likely to have an
impact on credit, market, liquidity, operational, reputational,
strategic risks, among others.
The management of these factors adopts a risk-based approach
prioritizing climate and environmental aspects based on the
relevance and materiality in the Group and in the current
landscape. We keep improving the consideration of the elements
that stem from the transition to a low-carbon economy, the
physical effects of climate change and biodiversity loss, and actions
to consider negative impacts on nature.
We manage social risk based on internal policies and frameworks,
which draw on international principles and sector standards, and it
adapts to the legal framework of the jurisdictions in which we are
present.
Additionally, governance risk is analysed from a dual perspective,
both the internal governance in Grupo Santander and the
assessment of our customers’, considering proportionality and
relevance criteria.
We identify below the typologies of climate and environmental
risks:

| Transition risk (TR) |  | Physical risk (PR) |
|  | Market sentiment Changes in the supply and demand of certain commodities, products and services which are considered climate risks and opportunities, pose a reputational risk among other potential issues. |  |  | Acute Intense extreme weather events, such as wildfires, hurricanes or floods. |
|  |  |  | Chronic Changes in rainfall patterns, extreme weather variability, average temperature rises, severe heatwaves, droughts and rising sea levels. |
|  | Policy action Implementing carbon pricing mechanisms to reduce greenhouse gas emissions; using energy sources with lower emissions; adopting energy efficient solutions; and promoting water efficiency measures and more sustainable land use practices. |  |
|  |  | Beyond climate |
|  |  |  | Natural risk Negative impact of nature degradation (including its biodiversity and the loss of ecosystem services) on economies, financial institutions and financial systems; and/or the lack of alignment of economic players with actions to protect, restore and reduce negative impacts on nature. |
|  | Technology The need to build and innovate to support the transition to an energy efficient financial system with lower CO2 emissions. This can have a significant impact on companies as new technology displaces obsolete systems and disrupts some components of the financial system as we know it. |  |

Annual report 2024 41

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We measure the potential impact of the climate and environmental factors of each risk type across several time horizons, based on the
average maturity of the portfolios analysed. The following table shows the potential impacts and our progress against the climate and
environmental matters in 2024, and next steps:

Risk type | Climate 1 and environmental drivers | Time horizon analysed | Potential Impact of climate and environmental risk factors |  | What we’re doing to manage climate and environmental risk |  | Next steps
Credit |  | Present day - short - medium - long term | → Extreme weather can lead to higher retail and corporate loan default and lower collateral value It can also lead to lower incomes, harm agriculture, and increase insurance coverage and premiums. Moreover, changes in wind patterns that reduce energy production can lead to higher operating costs and hamper productivity. The degradation of nature can affect productivity in the agricultural sector and the value of collaterals. This may increase loans repayments and early disposal due to property damage in 'high risk' locations. → Adverse weather conditions can cause significant financial losses, endanger communities, harm the environment and affect the value of collaterals. → The failure of borrowers to adapt their business models to a low-carbon economy could heighten credit risk and, therefore rise the risk of an income or activity reduction that may increase default or lead to a loss of business value. → Market sentiment that influences demand; obsolete technology; customer preferences. → Higher operating costs for carbon- intensive customers; information requirements (data gathering), especially on emissions (e.g. Scope 3) and green taxonomy disclosures; and new EU financial information directives stemming from government measures. |  | → Conducting materiality assessments to identify physical and transition risk in our portfolios. → Monitoring of climate concentration risks by sector and region in the short-, medium- and long-term. → Creating vulnerability heatmaps for the analysis of climate risks in the present day, short, medium and long term via Orderly, Disorderly and Hot House World scenario analyses. → Implementing mitigation measures such as policies, thresholds and insurance to combat risks and their impact. → Conducting scenario analyses and measuring sensitivities to forecast changes in ratings, the probability of default (PD) and loss given default (LGD) considering physical and transition risk. → Monitoring portfolios through metrics to control E&CC 2 risk factors in BAU processes. → Measuring E&CC factors across customer and transaction analysis and embed into ratings. → Monitoring risk appetite limits and alerts to manage climate-related sectors. |  | → Monitor the progress of the subsidiaries against The Climate Race (our credit risk target operating model for climate and environmental factors) to validate the successful inclusion of E&CC factors across the end to end credit risk cycle, to allow the identification and mitigation physical and transition risk. → Calculate financial impacts through internal climate models for the short, medium and long term. → Continue to develop and enhance tools to monitor E&CC factors that consider physical and transition risk in each segment.

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| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

Risk type | Climate 1 and environmental drivers | Time horizon analysed | Potential Impact of climate and environmental risk factors |  | What we’re doing to manage climate and environmental risk |  | Next steps
Market |  | Short term | → High volatility in market factors under stress scenarios. → Changes in market perception leading to wider credit spreads for business in impacted sectors. → Extreme weather conditions could raise concerns about the business plans of companies operating in the impacted sectors and widen their credit spreads. |  | → Regular reviews of climate stress scenarios and the subsidiaries that apply them. → Stress testing using physical and transition risk scenarios. → Trading portfolio analysis of current exposure to climate-sensitive business activities. |  | → Enhance stress testing by reviewing new scenarios to include in the exercise. → Adapt stress testing to market practices.
Liquidity |  | Short term | → Market impacts on the value of high quality liquid assets in Santander's liquidity buffer. → More frequent extreme weather that stifles economic growth in countries susceptible to climate change, causing sovereign debt to rise and limiting access to capital markets. → Cash outflows from companies trying to boost their reputation in the market or solve problems with climate scenarios. → Extreme weather conditions could cause financial impact on companies operating in the affected sectors impacting the funds deposited in the bank. |  | → Qualitative and quantitative climate scenario analyses of impacts on highly liquid assets (HQLAs) and financing of exposed companies. → Analysis of higher outflows due to changes in market perception of corporations in climate-sensitive business activities. |  | → Enhance stress testing and reviewing new scenarios to include them in the exercise. → Adapt stress testing to best market practices, including new liquidity scenarios to measure their impact.
Operational |  | Short - medium - long term | → Severe climate events can cause damage to our assets, including branches, data centers, headquarters and other owned or rented properties. Impacts on our own or our suppliers’ premises can also affect business continuity. → Climate and environmental - related factors can also lead to operational risk losses from litigation, claims due to inadequate sales or non-compliance with ESG standards. |  | → Conducting operational risk and self- assessment controls that include ESG- related risks to evaluate our exposure. → Conducting mandatory operational risk scenario analysis that cover extreme physical and transition risk events. → Including an ESG flag in the operational risk events database to identify events and losses from climate-related and environmental risks. → Including an assessment of climate threats in business continuity scenarios. → Conducting a materiality assessment on climate-related operational risk. → Updating documentation and delivering training relating to the embedding of ESG factors across operational risk management, as well as sharing best practices throughout the Group. |  | → Enhance operational risk reporting on climate and environmental - related factors. → Promote cooperation within the industry to share data, scenarios and best practices on climate-related operational risk management. → Work with the Corporate Insurance team to conduct analyses on the insurability of climate-related losses.

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| Contents |  | Business model and strategy |  | Sustainability statement |  | Corporate governance |  | Economic and financial review |  | Risk management and compliance |

Risk type | Climate 1 and environmental drivers | Time horizon analysed | Potential Impact of climate and environmental risk factors |  | What we’re doing to manage climate and environmental risk |  | Next steps
Reputational |  | Short - medium - long term | → Customers, investors and other stakeholders could believe that banks aren't doing enough to meet low- carbon targets, that they could be acting against their policies, or that their objectives do not meet stakeholders’ expectations. → Stakeholders’ potential perception of inadequate financing and investment in climate and environment-related sectors, including activities linked to deforestation and/or biodiversity loss. → Possible misinterpretation by customers, investors and other stakeholders of institutional disclosures or statements, actions, announcements, policies and the sustainability features of products. |  | → Implementing preventative measures to manage reputational risk and disclose risk data so that governance bodies can make informed decisions when assessing or sanctioning sensitive transactions that involve climate and environmental risk. → Regularly monitoring reputational issues and disputes (including climate and environmental matters) via working groups, involving functions such as legal, sustainability, investor relations, public policy, supervisory and regulatory affairs, risk, among others. → Development and update of greenwashing risk management guides that define the roles and responsibilities of key processes, and subsequently set specific training programmes. → Enhancing materiality assessments to measure climate-related and environmental reputational risk. Developing a methodology to quantify the reputational impact of climate and environmental risk. |  | → Continue to strengthen collaboration between business and support areas as well as risk and compliance functions to embed climate and environment-related reputational risk in our operations. → Continue bolstering greenwashing risk prevention, identification, management and control. → Continue managing ESG events that pose material reputational risk and anticipate these events through early detection measures.
Strategic |  | Short - medium - long term | → Our strategy could be affected if we fail to achieve our climate and environmental targets, including those related to the activities we fund and those related to our own operations. → Regulatory divergence between climate change and ESG requirements in the markets where we operate, including a possible new regulatory cycle and slowdown in the implementation of the Paris agreement. |  | → Challenging ESG targets in the Group’s strategic planning. → Monitoring the Group’s ESG indicators regularly. → Monitoring ESG indicators as part of our regular competitor analysis. → Identification of emerging ESG risks, including analysis of the potential impact under stressed scenarios on the Group’s strategic targets so that action plans can be implemented in the event such risks materialize. → Monitoring of ESG aspects in initiatives presented at the corporate product governance forum (CPGF) and investors’ forum. |  | → Regularly review ESG indicators to support alignment with the Group’s strategy. → Monitoring of Key Performance Indicators (KPIs) related to Business Model Performance. → Monitor climate and environmental threats as part of emerging risk identification.

1. Though all climate drivers impact on risk factors, we have only included the key ones in this table.
2. E&CC: environmental and climate change.
Chronic Acute Market sentiment Policy action Technology Natural risk
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|  | Risk management in SAM |
| SAM considers that climate-related factors can pose risks and opportunities for companies and have an impact on the long-term risk and return profile of investment portfolios. By analysing climate risk, we can better understand the assets we invest in, identify the issuers best positioned to overcome future challenges, seize new opportunities and create value for businesses and broader society. The climate-related risks that SAM’s ESG analysis model considers are: • regulatory risks related to greenhouse gas (GHG) emissions, such as higher prices; • the risk of new, more efficient low-carbon technology alternatives that may render existing technologies obsolete; and • market risks stemming from increased costs and shifting consumer demand, which could result in stranded assets; higher operating costs; lower demand for products and services; and the higher cost of, and limited access to, capital. |

2.3.1 Resilience of our strategy and business
model to climate change
Managing climate and environmental risk factors is key to continue
strengthening the resilience of the Group's strategy and business
model for climate change.
To enhance such resilience, we embed climate and environmental
risk factors in each stage of the risk management cycle through
which we analyse our own facilities and customer's financing
process. The risks derived from these factors is also included in our
policies, procedures, tools, metrics, governance and culture.
Embedding climate and environmental factors in our risk
management includes the identification, planning, assessment,
monitoring, mitigation and reporting, across different climate
scenarios and time horizons defined, see further detail in the next
section.
Additionally, the risk function works to strengthen our strategy via
the following processes:
• We carry out an analysis and challenge of the strategic plan (Risk
Challenge) to identify potential threats that may compromise the
achievement of the Group's objectives.
• We have a risk management control model to identify, assess,
mitigate, monitor and report all material risks, including ESG,
that could materialize and affect our strategy and/or business
model.
• Santander regularly conducts an emerging risks exercise to
identify key threats to our strategic plan under theoretical stress
scenarios with low likelihood of occurrence.
In this sense, we aim to identify, assess and monitor physical,
transition and regulatory risks that may have an impact on our
business model, profitability or solvency, improving the resilience
of our strategy.
The monitoring of the material issues related to the ESG risks
identified in the described processes, as well as the main lines of
action for their management, are periodically reviewed through the
corresponding risk governance bodies which participate in the
definition of the business model and the Group's strategy in this
matter.
Santander understands how climate-related and environmental
risks affect our business environment across the short, medium
and long term to inform their business strategy process. The way
that we strategically respond to changes and uncertainties in our
business environment stemming from climate-related and
environmental risks will impact the resilience of the business
model over time. We are explicitly considering climate-related and
environmental changes in macroeconomic and regulatory
environment and the competitive landscape, in particular, and
reflected in Santander’s business strategy processes, and
demonstrated by documented management body meetings and
discussions.
2.3.2 Risk management cycle
At Grupo Santander, we manage climate and environmental
factors with a special focus on those that are most material for the
different risk types.
Below we describe how we integrate these factors into the risk
management cycle.
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1. Identification
We conduct regular risk identification exercises to assess events
that could threaten the Group's strategic plan. These exercises
consider ESG risk factors — including mainly climate factors —
with additional consideration of other factors such as
greenwashing, environmental risks that go beyond climate (nature
and biodiversity), social risks, among others.
Risk identification helps us understand the internal and external
threats posed by the environment and climate change to our
business model, profitability, solvency and strategy.
Moreover, our internal risk taxonomy, heatmaps and materiality
assessments form the basis for identifying and classifying the
material environmental and climate-related risks in our portfolios.
2. Planning
We include risk management into the strategic planning process
that has different time horizons, in addition to the ad-hoc analysis
at each moment:
• One year for the short term (this is the standard time horizon for
the short term in the Group).
• One to five years for the medium term (financial planning).
• More than five years for the long term (strategic plan).
3. Assessment
We consider ESG aspects as factors that may impact existing risks
across different time horizons. We assess these factors regularly
according to regulatory frameworks and practices.
The assessment of the ESG factors that could be material due to
their potential impact on Santander's risk profile is conducted
considering the following aspects:

| Identification of ESG drivers: we use recognized sources including but not limited to: TCFD A, UNEP FI, ENCORE B, SBTN C, NGFS D , to identify climate and environmental aspects that can impact several risk types. We also use several tools for this exercise, including heatmaps, sectoral climate and environmental classification, historical information, idiosyncratic scenarios and forward-looking scenario projection to aid continuous monitoring. |  |  |  | Analysis of the transmission channels: we analyse how the factors identified in the previous stage can materialize and impact on the risk types included in our risk management framework. They can be macroeconomic (e.g. socioeconomic, productive) and microeconomic (e.g. affecting household wealth and/or income) in nature.
| Assessment of the materiality of the potential impact on the main risks: in this stage, we analyse the potential impacts that could arise from the materialization of the risk factors previously identified through the transmission channels described, based on qualitative and/or quantitative approaches. |  |  |  | Overview of a consolidated materiality: for internal and external disclosure of the materiality of ESG factors analysed, we aggregate the results of the impacts for each risk type in a consolidated report (detailed on the following pages), based on a five-point RAG E status (from Low to Very High) across the short, medium, and long term.

A. Task Force on Climate-related Financial Disclosures.
B. A materiality database of dependencies between production processes and ecosystem services.
C. Science Based Targets Network.
D. Network for Greening the Financial System.
E. Red, amber and green.
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The following table shows the consolidated results of the materiality
assessment by risk type and time horizon as of year-end 2024:

| Transition Risk |  | Physical Risk
ST | MT | LT |  | ST | MT | LT
Credit risk A |  |  |  |  |  |  |
CIB | l | l | l |  | l | l | l
Corporate & SME | l | l | l |  | l | l | l
Individuals | l | l | l |  | l | l | l
Auto Consumer | l | l | l |  | l | l | l
Operational risk B | l | l | l |  | l | l | l
Market risk | l | l | l |  | l | l | l
Liquidity risk | l | l | l |  | l | l | l
Reputational risk | l | l | l |  | l | l | l
l Low l Moderately low l Medium l High l Very high
Short term (ST): 2025 | Medium term (MT): >2030 | Long term (LT): >2050 A. Assessment as of September 2024. B. Assessment as of November 2024

In 2024, we continued to develop and enhance our materiality
assessment approach in order to strengthen the resilience of our
strategy. We have incorporated regulatory aspects, industry best
practices, further homogenization, and synergy among different
risk types in terms of sources, thresholds and scenarios.
The above table shows the final outcome of several procedures by
risk type. These procedures use various tools and methodologies to
assess the potential impact of climate factors. We use the above-
mentioned risk factor materiality assessment to underpin climate
risk identification and assessment as part of our double materiality
procedure.

| For more details, see section 1.3. 'Materiality Assess ment '.

The materiality assessment's rationale for each risk type is as
follows:
→ 3.1 Credit risk:
We conduct a materiality assessment every quarter to identify,
assess and monitor the Group’s climate-related and
environmental credit risks by sector and geography. This
assessment involves a review of the present day and other time
horizons based on climate scenarios.
We use in-house scenario analysis techniques and climate stress
test models to calculate and monitor climate impacts on key
credit risk metrics, such as the probability of default (PD) and
loss given default (LGD), across several time horizons, scenarios
and at all geography, sector and unit levels.
We complete this assessment with three further initiatives,
among others:
a. Customer assessment for the corporate portfolios that
analyze the key aspects of transition, physical, social and
environmental risk. This assessment is conducted locally.
b. Deep dives into key portfolios such as the collaterals in real
estate and auto loans.
c. Geographical assessment of physical risk (acute and chronic)
that uses information from expert models across different
scenarios and time horizons.
The findings of our materiality assessments are key to defining
our strategy, risk appetite, the identification of emerging risks
and even for other stress test exercises (such as the ICAAP-
Capital adequacy assessment process).
Materiality assessment enhancements in 2024
In 2024, we enhanced our credit materiality assessment to
reflect the latest industry and regulatory developments by:
a. Enhancing geographic granularity of physical risk (acute and
chronic) information in our European portfolio, from
Nomenclature of territorial units for statistics at level 3
(NUTS3) to postcode in our core markets of Poland, Portugal,
Spain and the United Kingdom;
b. The development of a new real estate module in Klima tool,
which includes physical and transition risks;
c. Improved how we manage and assess collateral through the
efficiency performance certificates (EPC) by obtaining data,
developing estimation models and drawing up plans to
gather such information during customer onboarding
processes.
d. Implemented concentration metrics to monitor physical and
transition risk management in our subsidiaries; and
e. Used internal climate stress test models (included in the
ICAAP) to calculate financial impacts (customer 'bottom-up'
approach for the CIB portfolio and 'top-down' approach at
sector and geography level for the rest of the portfolios).
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Klima

We run our materiality assessments through our ESCC Credit Risk
Management tool Klima, where we aggregate, manage and
monitor ESCC risks at local and Group level, with focus by sector
and geography. It also includes an analysis of the physical risks of
several economic activities and collateral.

We continue to work on enhancing climate information,
methodologies and use cases:
1. Climate materiality:
Though the findings by sector of our 2024 credit risk materiality
assessment (see table below) follow a similar pattern to 2023,
transition risk exposure in CIB to most vulnerable sectors
decrease slightly. On the other hand, our portfolios continue to
show less vulnerability to physical risk, given the concentration
in low-risk locations.

Materiality assessment - Climate risk analysis and portfolio heatmap
September 2024 (pre-mitigation) - EUR billion
| TR | PR | CIB | Other segments
Power (conventional) |  |  | 26 | 2
Power (renewables) |  |  | 13 | 0
Oil & Gas |  |  | 20 | 1
Mining y 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
¢ Low ¢ Moderately Low ¢ Medium ¢ High ¢ Very High
TR: transition risk. PR: physical risk. CIB: REC (on and off-balance sheet lending + guarantees + derivatives PFE: Potential Future Exposure). Other segments: Drawn amount; includes individuals, SCF, Auto US, Corporates and Institutions, and SMEs. Other sectors: considered as low risk; include: CIB, Corporate and SMEs outside the risk taxonomy perimeter // Individuals and SCF: cards and other consumer credit // Private Banking (excl. mortgages). Exposure 0 represents exposure below EUR 500 million.

2. Vulnerability heatmaps
We analyze materiality assessment findings through heatmaps
that show our vulnerability to climate risk. These heatmaps rate
climate risks on a scale from 1 to 5 (low to very high).
These heatmaps are based on the present day and on scenario
analysis methods and models that complement our qualitative
methodology and provide a forward-looking and geography-based
analysis of portfolios across the medium and long term,
considering impacts based on their probability, relevance and
duration. Although we illustrate these in the table below according
to the statistical classification of economic activities in the
European Community at level 1 (NACE 1, from the French
'Nomenclature statistique des Activites economiques dans la
Communaute Europeenne'-Statistical classification of economic
activities in the European Community) breakdown, our sector
analysis in risk management goes up to NACE level 4 to monitor
the composition of our portfolios, capturing most of our value
chain.
4 According to Note 54 "Risk Management": Based on internal models and results from regulatory and supervisory climate stress exercises, the Group does not believe that
additional environmental or climate change risk has had a substantial impact on its equity, financial situation and results in 2024
5 NGFS scenarios provide the common and up-to-date reference point for understanding the evolution of climate risks and trends in climate policy and technologies over
different time horizons. For this reason, they are used as a basis for showing impacts on our portfolios by calculating a range of outcomes.
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|  |  | Transition Risk |  | Physical Risk
|  | Current | Orderly | Disorderly |  | Current | Hot House World
|  | 2030 | 2040 | 2050 | 2030 | 2040 | 2050 |  | 2030 | 2040 | 2050
Oil & Gas |  |  |  |  |  |  |  |  |  |  |  |  |
Mining & Metals |  |  |  |  |  |  |  |  |  |  |  |  |
Power (Conventional) |  |  |  |  |  |  |  |  |  |  |  |  |
Power (Renewables) |  |  |  |  |  |  |  |  |  |  |  |  |
Transport |  |  |  |  |  |  |  |  |  |  |  |  |
Auto Consumer |  |  |  |  |  |  |  |  |  |  |  |  |
Agriculture |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  |  |  |  |  |  |  |  |  |  |  |
Water & Waste |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |
Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Risk level: ¢ Very high ¢ High ¢ Medium ¢ Moderately low ¢ Low

3. Internal climate models
Detailed below is an overview of our internal climate model:
Our climate internal models enable us to quantify the financial
impact 4 of transition and physical risks that we monitor through
changes in PD and LGD metrics. Our model estimates the direct
and indirect impact of macroeconomic and climate variables,
market trends and regulatory expectations. This model takes a
bottom-up approach by considering each client's financial situation
and technology. Where we don’t have specific customer
information, we use a top-down approach by sector and
geographical location.
The development of internal models allows us a high degree of
flexibility and capacity for analysis and adaptation to our portfolios,
including its characteristics and maturities, to new economic and
regulatory requirements. The main features are briefly described
below:
A. Scenarios are based on those published by the NGFS 5 and
Representative Concentration Pathways (RCP), developed by
the Intergovernmental Panel on Climate Change (IPCC), which
are references in the sector. Moreover, our Research
department embeds and broadens external scenarios to more
specific variables by country and sector to achieve thorough
vision aligned to our portfolios.
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B. Physical risk impact considers the financial impact of acute and
chronic risks, as well as long-term changes in weather patterns
to give us a wide range of events that we assess at regional
level. For these financial impacts, we use data from an expert
reinsurance company, considering scenarios across different
time horizons. We include physical risk impact through:
- Chronic: Impact on companies' revenue due to chronic
physical effects (e.g. change in productivity).
- Acute: Increase in costs due to damages to companies' assets
from extreme weather events.
C. The impact of transition risk, relates to changes in drivers such
as climate policies, technology and investor and consumer
sentiment that can affect demand, which affects customers on
an individual basis. Therefore, depending on the level of
information available, we carry out a bottom-up or top-down
approach.
D. Counterparty forecasts, which reflect the changes in the
financial ratios included in the credit risk rating models and are
based on forecasted revenues and costs under the different
scenarios, including physical and transition risk impacts. The
projected ratings give us the associated PD to the counterparty.
Lastly, the LGD is estimated using the Frye-Jacobs relationship
between PD and LGD.

NGFS scenarios |  |  | RCP climate scenarios |
| Physical and transition risks |  |  |  | Physical risk |
| Orderly, assumes ambitious climate policies implemented early, which gradually become stricter. Therefore, both physical and transition risks are relatively moderate. |  |  |  | RCP 2.6: stringent mitigation scenario with the aim to keep global warming below 2ºC. This is associated with orderly scenarios. |
| Disorderly, climate policies are not introduced until 2030 and may differ between countries and sectors.. |  |  |  | RCP 4.5: intermediate scenario where emissions reach their peak in 2040 and then decrease. This is associated with disorderly scenarios. |
| Hot house world (current policies), it is considering that some climate policies are implemented in some jurisdictions, but that global efforts are insufficient to stop significant global warming. Serious physical risks and irreversible changes, including rising sea levels. |  |  |  | RCP 8.5: very high GHG emissions. It is a business as usual scenario where emissions keep increasing throughout the whole century. This is associated with Hot house world scenarios. |

4. Customer assessment
For corporate customers within climate sectors according to our
risk taxonomy, the materiality assessment is complemented with
analysis performed at local level that considers key physical,
transition, social and environmental aspects.
We consider their findings in loan approvals and customer rating
procedures.
Challenges and next steps:
Santander continues to work on embedding ESCC factors in our
processes by upgrading our data, estimations, tools and models. In
particular:
i. Implementing models to assess the impact of climate on credit
risk metrics (PD and LGD) by using scenario analyses and
models, and including customers' ESCC assessments in
corporate portfolios ratings.
ii. Localizing CIB customers’ production sites to obtain more
accurate results in physical risk assessments.
iii. Calculating financial impacts across the short, medium and long
term through the climate stress test models already included in
the ICAAP.
Auto consumer

We conduct an in-depth analysis of this portfolio given the
weighting of the Consumer Auto in Santander's portfolio and its
specific characteristics and regulations. We consider key risk
factors such as products evolution, residual value risk, portfolio
average maturity, shifts in market sentiment and technology
developments adapted to different markets. Moreover, we
review other characteristics such as product type, borrowers'
credit risk profile, engine type (internal combustion engine,
hybrid or electric vehicle).

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Physical risk

To assess physical risk by geographical location, we work with a
leading provider in the reinsurance industry, which enables us to
measure the risk of 13 physical hazards (eight acute and five
chronic). We analyse the markets where we operate, with a
breakdown of over 1,250 regions (NUTS 3 or equivalent), and
cover all economic activities in our Risk Taxonomy, as well as the
business lines (such as mortgages and automobiles).
We assess each region (NUTS3) to measure the associated
physical risks by rating them on our five-point RAG (Red, Amber
and Green) scale (low to very high).
To assess the frequency and intensity of natural hazards, we use
RCP scenarios across different time horizons (present day, 2030,
2040, 2050 and 2100).
Our analysis, based on a conservative approach, uses RCP 4.5
scenario and time horizons of 2030 for economic activity sectors
and 2050 for collaterals at Group level. The results are included in
our materiality assessment at Group level, by region (Europe,
North America and South America) and by subsidiary. The results
show that while certain sectors are more exposed to physical risks,
such as agriculture, conventional energy and mining, their
concentration in the Group is very low (between 1% and 2%). The
collateralized portfolios have the lowest impact, albeit with very
high concentration of exposure in the Group.
The granular, forward-looking physical risk assessment enables us
to actively manage these risks through monitoring, metrics and
mitigation measures.
Finally, to measure and quantify physical risks more accurately,
we increased the granularity of physical risks for the European
portfolio (Poland, Portugal, Spain and the UK, as we now have
information at postcode level).

Real estate

Santander’s real estate portfolio accounts for a large proportion of
Santander's balance sheet, which is why we developed a specific
module within the Klima tool with a detailed overview of the
portfolio’s transition and physical risk.
Regarding transition risk, we increased the quality and quantity of
EPC data by obtaining information, developing estimation models
and defining plans to gather information during the customer
onboarding process. This internal model consists of a machine
learning algorithm that applies a combination of variables related
to the real estate guarantee (type of property, geographic
location, etc.), learning from observations made from actual data
available. These enhancements give our analysis a broader scope,
covering the corporate and retail segments.
This chart shows the EPC coverage of our balance sheet and
distribution of actual and estimated EPC labels based on the
standards and regulation in each market where this information
exists:
Residential and commercial real estate EPC data (December
2024):
Distribution of exposure to residential and commercial real
estate portfolios by EPC (December 2024):
Distribution based on Portfolio with EPC information. (RAG according EPC Standards)
We made considerable progress with physical risk through a
review of acute and chronic risks in several scenarios and time
horizons, broken down geographically at NUTS3 level. Considering
a forward-looking view across different time horizons, the
percentage of exposure to high and very high physical risks is not
material compared to our total portfolio.
Nonetheless, we continue working on conducting a more granular
assessment in Europe, where portfolio concentration is higher.

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→ 3.2 Operational risk:
We assess the potential impact of physical risk through a
combination of specific location-based risk scores, data on the
bank’s own facilities and insurance, and internal scenario
analysis for certain physical risks. We assess the potential impact
of transition risk through operational risk tools and external ESG-
related events.
We assess physical risk as low in the short term and moderately
low in the medium and long term, mainly due to exposure to
more frequent and severe weather events in the regions where
we operate.
For transition risk exposure, the most affected time horizon is the
medium term, owing to legal and compliance risk arising from
adaptation to new regulation in each jurisdiction, an increase in
the number of greenwashing-related sanctions, an increase in
the volume of green business, and greater awareness of climate
change among external stakeholders.
→ 3.3 Market risk:
To assess the potential impact of climate factors, we conduct
regular analysis of our trading portfolios to identify the
materiality of positions with potential exposure to market risk
climate factors. We then compare the findings from climate
stress scenarios (both physical and transition risk) to those from
internal, stressed and budget scenarios. This analysis concludes
that the materiality is low or moderately low depending on the
time horizon, due to the low exposure to climate sensitive
sectors both in the bond and equity portfolios.
→ 3.4 Liquidity risk:
To assess the potential impact of climate factors, Santander
compares the findings of climate stress scenarios with liquidity
stress scenarios. We have a suite of physical and transition risk
scenarios (disorderly transition scenarios, extreme climate
events, historical events, etc.) whose impacts on liquidity are
well below current internal and regulatory stresses due to their
limited effect on high quality liquid assets (HQLA) and stable
retail deposits.
→ 3.5 Reputational risk:
We conducted a reputational risk materiality assessment in 2023
(and updated it in 2024) to assess the potential impact on
reputation of the key climate-related and environmental levers
across the short, medium and long term under several scenarios.
As with our strategy, policies and management models, we
consider the environment collectively. Thus, the materiality
assessment includes identifying and assessing climate change
and other environmental impacts.
The assessment is a complex procedure that considers several
sources of information and criteria across these phases: i)
definition of reputational risk levers related to physical and
transition risk; ii) assessment of risks by country and by portfolio
exposure in sensitive sectors; iii) climate scenarios according to
the Network for Greening the Financial System (NGFS); and iv)
time horizons (short, medium and long term).
The reputational risk materiality assessment findings show that
transition risks would have a greater reputational impact than
physical risks, as transition risks tend to relate more to
stakeholder scrutiny over time, which are the main grounds for
reputational risk exposure.
It is our aim to have clear climate and environmental risk
objectives, policies and procedures, and solid governance to
manage them correctly. Even if extreme climate events occur,
and based on the experience of several of them recently, from a
reputational risk management standpoint, we believed that
Santander has demonstrated its strength and robustness in this
regard and its ability to react to a given event.
In 2024, we updated our reputational risk materiality
assessment approach based on official reports and studies from
recognized organizations. Additionally, we have continued
working on further homogenization and synergy between risks
in terms of information sources, thresholds, scenarios and
others.
4. Monitoring
In addition to the processes described above, we carry out a
continuous monitoring of ESG aspects based on:
• At Grupo Santander, we constantly monitor the risk profile and
our compliance with risk appetite limits through control
functions that report to the board.
Since 2021, we have been enhancing our risk appetite
statement with quantitative metrics for thermal coal and
mining and power related customers.
In 2024, we implemented the metrics approved in 2023 for oil
and gas, steel, and aviation. We also approved two new
metrics, one for the automotive sector and the other for
Santander Consumer Finance's Auto business which will be
implemented in 2025.
• We are in permanent contact with our customers to monitor
and support their transition plans. We continue to embed ESG
risk factors in credit risk granting and monitor processes
through our target operating model, The Climate Race.
This model is supported by the following pillars: strategic
planning, risk management, loan approval and tracking,
models and systems, and culture and governance. The timeline
to implement was defined for 2023 and 2024 considering the
supervisory expectations and Group's strategy. During 2025,
we will continue with a more granular implementation.
• Our ESG Regulatory Radar enables us to monitor updates to
ESG and other regulatory frameworks, as well as the potential
efforts and financial impacts that the implementation of these
changes may entail.
• Moreover, the Risk, Compliance & Conduct function monitors
ESG initiatives (including acquisitions and divestitures)
presented to the investment forum — whose delegated
authorities come from the board executive committee —, as
well as from the corporate product governance forum (CPGF).
6 To the extent required by applicable law, customers and transactions involving activities enumerated in this section will be subject to an enhanced due diligence process to
determine the unique risks presented prior to decisioning.
7 EQAL: ESCC Questionnaires & Assessments Library.
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• During 2024, we continued working on o ur Climate Community
as an additional lever for a proper integration of ESCC risk
factors in the Group in a collaborative manner. This community
keeps the units up to date, shares best practice, sets guidelines
to support homogeneous implementation and provides a clear
governance structure and allocation of responsibilities. For
more details, see the following chart:
5. Mitigation
We have various internal policies and frameworks that integrate
climate and environmental factors into our risk management
processes. These elements are key to mitigating and adapting
climatic and environmental factors.
Our ESCC risk management policy establishes the standards for
investing, and providing financial products and services to
companies and customers in oil & gas, power generation and
distribution, mining and metals, and soft commodities (especially
retail customers dedicated to farming and ranching in the
Amazon). It dictates prohibited activities and those that require
special attention for the aforementioned sectors 6.
Our credit granting policies consider climate and environmental
factors such as, among others, our internal taxonomy (SFICS),
credit committees conclusions, corporate clients' ratings and
collateral management.
To mitigate the risk of greenwashing, we reviewed key processes
and responsibilities to facilitate the appropriate development,
management and disclosure of our sustainability strategy,
products and practices, while monitoring regulatory developments
in this area.
We also mitigate this type of risk through client engagement for
the most material sectors according to the climate materiality
assessment.
This enables us to support customers in their transition to a more
sustainable economy, offering them tailor-made solutions and
generating business opportunities. Engaging with customers gives
us access to data on ESG risk that we can use for internal risk
management and reporting. Obtaining and cross-checking data
directly from our customers is one way to mitigate ESG risks,
including greenwashing.
Additionally, we consider ESG aspects in customer assessments to
determine whether they have an impact on credit quality.
We launched several projects so that credit analysts have all the
information and tools necessary to perform this assessment.
• Sector guidelines are followed to identify the major transition
and physical risks each sub-sector is exposed to and how to
pinpoint them in customer engagement. We delivered training
sessions in several markets to build on these guidelines.
• ESG assessment guidelines with different levels of detail
depending on the risk. In some instances, we conduct an
automated assessment at different levels for physical,
transitional and reputational risk, with higher risk levels
undergoing a more comprehensive and contextual assessment in
material cases. We’re implementing this assessment model for
our retail banking portfolio across several markets.
• Survey library (EQAL 7): we developed a global tool to customize
and store our numerous ESG surveys and assist in their
identification and review. This will enable us to compile
historical ESG data and conduct more aggregated analysis based
on wider criteria. EQAL is now operational in Portugal and is
currently being implemented in Spain. For Brazil, the system will
be customized to replace the existing tool currently in use in the
country.
Lastly, we continue working on other mitigation levers:
i. Credit committees, which embed environmental, social and
climate change factors in transaction reviews.
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ii. CIB customer ratings, including qualitative environmental,
social and climate change assessments for material sectors.
iii. Special prices for certain products.
iv. Collateral management (EPC), based on enhanced data
acquisition, estimation model development, and information
collection during the customer onboarding process.
v. Specific procedures to analyse environmental, social and
climate change risk. The board and its committees verify that
decisions are made according to our ESCC and reputational risk
policies. The first line of defence conducts a due diligence with
special sector-based questionnaires for credit approval. The
reputational risk assessment also forms part of decision-
making contributing to compliance and preventing from risk of
false accusations (with particular focus on greenwashing). The
due diligence consists of assessing the CIB's project finance
transactions according to the Equator Principles.
vi. Lastly, we have a multidisciplinary working group, where,
among others, ESG issues are considered. This group is
coordinated by the reputational risk function and discusses
actions needed to mitigate any matter that may have a
reputational impact.

|  | ESG classification meetings |
| Throughout 2024, we worked on extending our sustainable operations identification model to all global businesses, amending existing processes accordingly. We created local and global commercialization committees and ran ESG classification meetings as the governance bodies tasked, analysing and monitoring products and transactions with an ESG component, ensuring that these bodies have experts to interpret and demonstrate ESG standards through centers of excellence as well as seeking input from business, risk and sustainability teams. We began working to implement the updated sustainable classification model by identifying the affected processes and the changes to be made across markets. |

6. Reporting
Transparent and regular reports to senior managers and
stakeholders help us manage climate and environmental factors
and comply with the law and supervisors’ expectations.
We work so that the information available to our stakeholders is
complete and consistent, conveys adequately Santander's
sustainability strategy and management, and mitigates potential
risks.
Our reporting on climate and environmental risk management
includes our Annual Report, the ICAAP exercise, and our Pillar 3
disclosures report.
Main activities in 2024

→ Advances in risk appetite, establishing new metrics and limits to
support our strategy.
→ Development of internal climate models that enable us to
enhance how we quantify the financial impact of transition and
physical risks on credit risk variables.
→ Increased geographical granularity in physical risk information
(acute and chronic) for the European portfolio, from NUTS3 to
postcode in Spain, Portugal, UK and Poland.
→ Improvements on how we manage and assess collateral
through the EPC by obtaining data, developing estimation
models and development plans to gather information.
→ In order to mitigate the risk of greenwashing, we have reviewed
the most relevant processes and responsibilities to validate the
correct definition, management and disclosure of our strategy,
products and practices.
→ Progress in the implementation of the climate risk management
model through the Climate Race initiative to integrate ESCC
factors into the credit risk granting process.
→ Advances in materiality assessments in terms of biodiversity
through an internal methodology to assess both nature-related
impacts and its dependencies.

8 Monthly metric. Banco Santander has zero tolerance for very high impact events, including ESG-related ones. The reputational risk function puts forward events with ‘very
high’ impact, which the compliance committee verifies. Circumstances that could lead to a ‘very high’ impact event are: i) events that trigger silver or gold crisis management
committees; ii) regulatory requirements that uncover significant weaknesses or shortcomings: very high financial penalties (above EUR 10 million), permanent cessation of
economic activity, capital aggregation, loss of banking licence, restrictions on dividend distribution, etc.; iii) events with a very high impact on public opinion: with widespread
and sustained negative media and TV coverage in a single market and/or in other markets for over one week or very high impact on social media; and iv) suspension of shares
trading or a drop in share price of over 5% in one day on the back of the issue in question.
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2.3.3 Reputational risk
This section outlines how we manage this IRO, considered a
climate-related transition risk:

| R | Reputational risk based on the perception of bank progress with climate-related policies and objectives. |

Banco Santander manages reputational risk through the
Reputational Risk Model, which sets out the principles to identify,
manage, prevent and control reputational risk in every procedure,
including related ESG factors.
We conduct the reputational risk impact assessment through key
ESG procedures. These include setting objectives; taking part in
ESG working groups and governance bodies, the structuring of
transactions that may be ESG sensitive and in reporting.
To evaluate the performance and effectiveness of these actions,
Banco Santander has implemented a metric 8 based on the number
of very high-impact reputational risk events that have materialized
and have affected various interested parties.
To manage this risk, across short, medium and long term horizons,
we identify in the table of section 2.3. the possible impact of the
risk factors, the actions we’re performing to manage them and
next steps we have in mind.
2.3.4 Potential financial effects
To cover the CSRD requirements related to financial effects (E1-9),
in this report we include information of the exposure affected by
material physical risks. Since this is a phased-in requirement, we
will expand the information in the next reports to provide full
coverage of the Regulation.
To comply with the requirements, we use the information
disclosed in the Pillar 3 ESG report according to the 'Implementing
Technical Standards on prudential disclosures on ESG risks' defined
by the EBA (European Banking Authority).
This report covers information of the banking book portfolio,
including loans and advances, debt securities and equity
instruments. The Group guarantees that the information included
is aligned with other reports (mainly accounting reports).
Physical risk:
We report below our exposures sensitive to impacts from relevant
acute and chronic physical risks (collateralized and non-
collateralized).
To assess the physical risk of our portfolio, we sourced information
from an external provider on acute and chronic physical risks to
cover over 1,250 regions in our core markets.
To assess the physical risk of our portfolio, we implement the
methodology of our external provider.
Based on the information provided, we make the following
assumptions to determine the Group’s sensitive exposures to the
impact of physical risk:
i. A n activity in a region is considered as sensitive to the impact of
physical risk when at least one hazard is assessed as 4 or higher
on the scale provided.
ii. We use the RCP 4.5 scenario, which is between a scenario that
considers that the Paris Agreement objectives are met (RCP 2.6)
and a more specific stress exercise scenario (RCP 8.5).
iii. We consider time horizons that are consistent with the average
maturities of our portfolios, under a conservative approach.
Thus, for non-collateralized exposures, we considered a time
horizon of 2030 and for collateralized portfolios, with longer
time horizons, we used 2050.
iv. Regarding the location considered for the physical risk
assessmen t, we analyse the location of collateral and the
headquarters of our customers for non-collateralized loans at
postcode level for exposures in Poland, Portugal, Spain and the
UK. NUTS3 level is used for the remaining geographical
locations.
According to the assumptions described, our exposure to material
physical r isks is EUR 54 billion as of December 2024, which
accounts less than a 3% over Group’s total assets.

EUR bn | Chronic | Acute | Both | Total
Total | 29 | 20 | 5 | 54

In the Pillar 3 ESG report, the information related to physical risk is
disclosed at the regional level (Europe, South America and North
America), identifying higher concentration of relevant physical risks
in Europe (44%).
2.3.5 Our approach to nature and biodiversity
Climate change is inextricably linked to biodiversity and nature.
Climate change is one of the main drivers of nature and biodiversity
loss and impacts the resilience of ecosystems, limiting their ability
to regulate climate and serve as carbon sinks.
While our materiality assessment considers 'Biodiversity and
ecosystems' an informative topic, we continue to oversee our
9 The main environmental impact of our offices stems from their maintenance and how we manage the waste we generate. So far, we have not deemed it necessary to adopt
biodiversity mitigation measures in our operations. Nonetheless, on certain occasions we have considered corrective or mitigation measures as part of our customer lending
due diligence and in application of our ESCC policy.
10 LEAP approach: locate, Evaluate, Assess and Prepare.
11 This analysis does not consider systemic risks since no tools have been identified that include them.
12 To the extent required by applicable law, customers and transactions involving activities enumerated in this section will be subject to an enhanced due diligence process to
determine the unique risks presented prior to decisioning.
13 The Convention on Wetlands (known as the Ramsar Convention) is an intergovernmental treaty that provides the framework for the conservation and wise use of wetlands
and their resources.
14 The International Union for Conservation of Nature (IUCN) (iucn.org) classifies protected areas according to their environmental management objectives: Category I: Nature
Reserve and Wilderness Areas, Category II: National Park, Category III: Natural Monument or Feature, Category IV: Habitat/Species Management Area.
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operations and impact on biodiversity and nature in view of our
climate objectives.
Given our financial activity, and the location of our buildings and
offices, mainly in urban areas, no sites located in or near
biodiversity sensitive areas are identified 9. We are conducting an
analysis to determine whether any of them could be in or near
biodiversity sensitive areas.
We conducted an assessment on our corporate portfolio, which
considers the country in which our customers operate, to learn of
the direct impact and dependency of their business on nature and
biodiversity.
We followed the Task Force on Nature-related Financial
Disclosures’ (TNFD) LEAP 10 approach. We used two tools:
• ENCORE: A materiality database of dependencies (physical risks)
between production processes and ecosystem services. For our
core markets, we complemented the database with internal
localization criteria based on ENCORE’s hotspot depletion maps.
These criteria cover three natural capital assets: soil and
sediment, water, and biodiversity.
• UNEP FI Impact Analysis Tool: This tool provides an in-built
impact (transition risks) mapping that, combined with our
internal data and context, enables us to identify the most
significant impact areas of the portfolio.
The ENCORE database helps us to begin to understand how the
deterioration of natural assets could cause a loss of production
processes, and the financial consequences it could have.
This methodology enabled us to analyse their dependencies
(physical risks 11) on over 20 ecosystem services in more than 10
sub-segments of our corporate lending portfolio.
Additionally, in 2024, Santander Brasil participated with various
organizations in TNFD pilots to explore how to tackle nature
impacts and dependencies more effectively. We used the LEAP
approach and focused on the Locate phase. We gained important
insight into how data gaps and a lack of methodologies tailored to
highly biodiverse tropical countries limit private companies’ ability
to account for those factors accurately. Addressing these issues
will require further work and collaboration throughout the sector
to align with stakeholders’ expectations.
Nature and biodiversity heatmap
Based on the above mentioned approach, we use a 'heatmap' to
aggregate nature-related dependencies and show the level of
threat of potential events that may affect our corporate portfolio at
Group level.
We used this exercise as an input to meet disclosure requirements
ESRS E2 (Pollution), ESRS E3 (Water and marine resources), ESRS
E4 (Biodiversity and ecosystems) and ESRS E5 (Resource use and
circular economy) in relation to ESRS 2 IRO-1. We rate our
dependencies on a scale of 1 (very low dependence) to 5 (very high
dependency). These are the results:

|  | Corporate portfolio
Pollution | Pollution of air | l
Pollution of water | l
Pollution of soil | l
Pollution of living organisms & food resources | l
Substance of concern and very high concern | l
Water & marine resources | Water withdrawals, consumption and use | l
Habitat degradation & intensity of pressure on marine resources | l
Biodiversity & ecosystems | Direct drivers of biodiversity loss | l
Impacts on the state of species and on the extent and conditions of ecosystems | l
Impacts & dependencies on ecosystem services | l
Circular economy | Resource inflows, including resource use | l
Resource outflows related to products and services | l
Waste | l

l | Very low | l | Low | l | Medium | l | High | l | Very high

No nature-related topic or sub-topic was considered material at
Group level. We monitor these and other sectors closely as part of
regular updates to our nature materiality assessment.
Nature and biodiversity in our ESCC policy
Santander embeds nature and biodiversity conservation measures
in financing and investment policies. Our global environmental,
social and climate change (ESCC) risk policy 12 dictates prohibited
activities that Santander will not directly invest in, or provide
financial products or services to, regarding biodiversity matters:
• Any projects or activities in areas classified as Ramsar Sites, 13
World Heritage Sites, or categories I, II, III or IV by the
International Union for Conservation of Nature 14 (IUCN).
• Any projects or expansion of existing oil & gas facilities north of
the Arctic Circle.
15 High risk geographies are every country in Africa, plus Argentina (Chaco, Formosa, Santiago del Estero, Salta and Tucumán only), Bolivia, Brazil (the Legal Amazon and the
north east of the country only), Cambodia, China, Colombia, Ecuador, Estonia, Guatemala, Honduras, India, Indonesia, Laos, Latvia, Lithuania, Madagascar, Malaysia, Myanmar,
Nicaragua, Panama, Papua New Guinea, Paraguay, Peru, Russia, the Solomon Islands, Thailand, Vietnam and any customer declared 'unknown'. This list will be subject to
review based on the expansion of agribusiness to new geographies.
16 Sectors covered by the ESCC Risk management policy and additional tactical sectors included in the CIB Procedure, as well as other material businesses and sectors
depending on the geography and local legal requirements.
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• Extraction and sale of native tropical wood species not certified
by the Forest Stewardship Council (FSC).
• Palm oil processors that are not members of the Roundtable on
Sustainable Palm Oil (RSPO).
• Developments in forested peatlands in 'High Risk
Geographies'. 15
The assessment of the client's ESCC risks in the applicable sectors 16
is first completed by the financial manager before a team of
analysts conducts an overall assessment. The ESCC risk and
compliance departments delve deeper into cases that uncover red
flags. We usually conduct this extended due diligence exercise
with the client to deepen our understanding of the risk profile and
determine the existence (or not) of corrective or remediation
measures.
As our global ESCC risk management policy dictates, we consider
environmental, social and climate change risks and also conduct
annual reviews of our customers and pay particular attention to
potential deforestation risk with agribusiness customers in the
Amazon biome.

| For more details on our ESCC risk management policy, see section 3.2.3 ' Environmental, social and climate change risk management'.

| Nature-based solutions are key to carbon storage and climate resilience. Santander supports several initiatives that foster these solutions: • Biomas, an ecosystem restoration enterprise that seeks to plant two billion native trees to reforest and protect two million hectares of degraded lands in Brazil over the next 20 years, removing 900 million tonnes of CO 2 e from the atmosphere. • Santander España — through Motor Verde — will finance three new forests of over 300 hectares to absorb 82,000 tonnes of CO 2 e. Two of them have already been registered with the Spanish Office of Climate Change and the third is in the initial phase. • Santander UK continues to form part of the Net Zero With Nature UK national parks initiative by helping develop a platform to secure private financing for nature-based solutions. We’re also supporting the restoration of peatlands in the Cairngorms and the improvement of water quality at Lake Windemere. • Since 2021, Santander México — through “LikeU” — has been helping customers contribute to reforestation in collaboration with Reforestamos México, which has been operating for 19 years. |

Santander and the Brazilian biomes
Santander promotes the protection and sustainable development
of Brazil’s biomes, which is critical to tackling climate change and
conserving biodiversity. We need economic growth, but it must be
sustainable.
Brazil accounts for approximately 3% of the world’s greenhouse
gas (GHG) emissions. According to Observatório do Clima the main
sources of emissions are land-use change (46%), particularly
deforestation, followed by the agricultural sector (25%), a sector
that plays a crucial role in the national economy and is vital for
global food security. A significant part of the deforestation is illegal
and driven by property speculation in public lands. According to
Amazon Environmental Research Institute (IPAM), 50% of the
Brazilian Amazon deforestation occurs on public land, especially in
undesignated public forests. These forests are easy targets for land
grabbers and illegal exploitation due to poorly defined tenure
rights.
In recognizing the importance of its biomes, the Brazilian
government created and passed the Brazilian Forest Code in 1965
and revised it in 2012. It is one of the world’s strictest
environmental laws, establishing the necessary protection
percentage for each of the country's biomes.
As strict as the Code is, the main challenge lies in its
implementation. A lack of effective adherence and enforcement
has led to illegal deforestation and environmental degradation
over the years.
Addressing GHG emissions and biodiversity protection in Brazil
requires a multilateral approach that includes strengthening the
implementation of environmental laws, continuously promoting
sustainable agricultural practices, and improving monitoring and
transparency.
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| According to the 2022 MapBiomas report, a significant portion of Brazil’s deforestation is illegal. Illegal activity has a major environmental impact and undermines efforts to control emissions. The MapBiomas platform uses pixel-by-pixel classification of Landsat images processed through machine learning algorithms in Google Earth Engine. Despite its limitations, such as the inability to identify areas with deforestation permits issued by state-level governments, it is a highly effective tool for monitoring deforestation. |

We’ve been working with our customers to promote sustainable
development in Brazil for years. In 2002, Santander became the
first private-sector bank in Brazil to run credit analysis on
environmental and social risk. In 2016, we were the first bank to
formally incorporate a sustainability score into our corporate
customers’ credit rating.
Risk management
Environmental and social reviews of companies
Santander Brasil conducts annual reviews by analysing the socio-
environmental practices of wholesale companies and main
customers of SMEs with credit limits or risk exceeding BRL 7
million and that belong to one of the 14 priority social,
environmental and climate sectors (including all TCFD sectors,
depending on their level of risk). In the past decade, we have
analysed approximately 2,000 corporate and retail customers on a
yearly basis to determine whether they comply with the law and
follow best practice. This procedure begins with a standardized
public questionnaire that we send to customers. A team of ESCC
risk specialists reviews the returned questionnaire by cross-
referencing it against government permits, fines, embargoes,
lawsuits, contaminated land reports, press reports and other public
information.
The analysis may require additional questions. Upon completion of
the analysis, the ESCC risk specialist compiles a report with a score
of 1 to 5 that covers environmental, social and climate factors
separately, including such aspects as water stress, climate
resilience, contaminated land, human rights, environmental
sanctions and supplier control. We have further procedures for
customers in mining, sugar and beef production.
Farmers and ranchers
A significant portion of illegally deforested lands does not have a
clear owner or is government-owned property. For this reason,
Santander verifies the land ownership or lease before financing
farmers and ranchers.
As part of the credit approval process, we work with a satellite-
imaging firm to monitor the properties that we finance or take as
collateral throughout the entire loan term. We receive daily
information on government embargoes against production on
illegally deforested land; modern slavery; and incursions into
government protected indigenous land, parks and conservation
areas. We monitor approximately 19,000 properties for
deforestation alerts.
If we identify any issues, we request an explanation from the
customer. If we uncover a material breach of environmental laws
and regulations, our standard contracts allow us to demand the
early repayment of loans.
Santander also uses Internet-based satellite-imaging tools Global
Forest Watch and MapBiomas to track the detailed loss of tree
cover on customers’ farms and ranches over time.
Collaborating with initiatives to stop deforestation
F ebraban Protocol for livestock in the Amazon
Santander actively collaborates with customers, governments,
regulators and NGOs to tackle illegal deforestation. Santander
Brasil is a member of Febraban’s committee on forestry and
agribusiness.
We have been seeking commitments from beef processing
customers in the Amazon since 2020. In 2021, Santander Brasil
began engaging with more than a dozen of these customers to
tackle illegal deforestation linked to their supply chain by 2025.
Santander Brasil, along with other banks, shared lessons learnt
with Febraban, which lead to the creation of the sectorial protocol -
SARB 026/2023 - in March 2023, which sets the standards for
managing the risk of illegal deforestation in the bovine meat chain.
The protocol defined guidelines to be adopted by its signatories.
By signing the protocol, Santander has aligned its objective with
that of the Brazilian financial industry, and has been engaging with
its meatpacking customers. This requires beef processing
customers with slaughterhouses in the Brazilian Legal Amazon
region to end illegal deforestation by December 2025, both from
direct suppliers of cattle and Tier 1 indirect suppliers, and
demonstrate progress against. They also must meet mid-term
milestones.
Signatory banks must monitor the implementation of actions by
the deadlines stipulated by the regulation, reviewing customers'
public reports on the dates established by the protocol and taking
measures based on the content published by beef processing
customers.
Since the objective was established, Santander has actively
engaged with all beef processing customers affected by the
protocol, leveraging our technical expertise to assist in developing
their traceability plans and reports. We monitored their progress
reports throughout 2024, and by the December 2023 deadline
100% of eligible customers had been verified for protocol
compliance. For those who did not initially present the required
plans, credit limits were temporarily suspended and reinstated
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only upon compliance. We will continue to act accordingly and
monitor compliance with the milestones set by the Febraban
protocol, checking adherence to the implementation timeline.
RTRS and MBPS
Santander Brasil takes part in two other external initiatives that
propose solutions to stop deforestation; it was a co-founder of the
Roundtable on Responsible Soy (RTRS), and chaired it from 2006 to
2009. The bank also co-founded the Brazilian Roundtable on
Sustainable Livestock (MBPS, in Portuguese).
IFACC
We were the first bank to join Innovative Finance for the Amazon,
Cerrado and Chaco (IFACC), an initiative coordinated by Nature
Conservancy, the Tropical Forest Alliance and UNEP FI (a United
Nations environmental programme that focuses on sustainable
financing). The aim is to accelerate sustainable production finance
through the structuring of mechanisms such as loans to rural
producers, land investment funds, and corporate debt and capital
market instruments.
Nature-Based Solutions Investment Collaborative
In 2024, we were the first bank to join the NBS Investment
Collaborative, a platform with 10 members and 11 partners, led by
Capital for Climate, focused on mobilizing BRL 5 bn for nature-
based solutions in Brazil by 2025.
Amazon Finance Network
To protect the most important and diverse biome, in late 2023 we
joined the Amazon Finance Network, an alliance launched during
COP 28 that aims to generate sustainable impact throughout the
Amazon region. It brings together 52 financial institutions with the
aim of increasing investment flows, mobilizing capital, promoting
financial inclusion, sharing knowledge on innovative financial
solutions, and generating synergy with the public sector.
Social impact
We understand that supporting the socioeconomic development of
the Amazon and other biomes and their residents is fundamental
for their preservation and for the development of the country.
Helping local people maintain their livelihoods is key to preserving
this ecosystem. We want communities and entrepreneurs to
develop further and count on our support as they do.
We joined forces with other banks and entities to help launch
Jornada Amazônia, a platform that Fundação Certi runs. Its aim is
to stimulate the Amazon’s innovation and entrepreneurship
ecosystem, with a focus on bioeconomy solutions for forest
conservation. The platform’s core objectives include training 3,000
talented people and creating 200 startups by the end of 2025.
Jornada Amazônia continues to progress and gain the support of
other partners, including the Inter American Development Bank
(IDB) and Instituto Itaúsa (the ESG arm of the Itausa holding
company). Progress so far includes:
• 2,134 people given entrepreneurship training (71.1% of the
target for 2025), 55% of which were women;
• 71 startups created and structured (35.5% of the target for
2025), with a cycle to create more startups under way; and
• 22 startups classified and ramped up (22% of the target for
2025), with a new acceleration cycle under way with 45
entrepreneurs.
We gathered 15 Santander executives to act as mentors in the
Synergy programme to help entrepreneurs in such areas as people
management, legal issues, investor access, network building and
strategic vision and direction of the company.

| For more details on Santander and the Brazilian Amazon, visit our corporate website santander.com .

17 For 2025, in countries where we can verify electricity from renewable sources at Banco Santander properties. Target considers the 10 core markets in which we operate.
18 The Stated Policies Scenario (STEPS) is designed to provide a sense of the prevailing direction of energy system progression, based on a detailed review of the current policy
landscape.
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2.4 Aiming to align our activity with the Paris Agreement Goals
In this section we cover how Santander manages the following
IRO:

| I- | Adverse impact on climate and the environment due to the bank’s financing of, or investment in, certain non- sustainable assets and activities. |

We continue working towards our ambition of net zero carbon
emissions by 2050 by progressively setting specific actions to
support our customers in their climate objectives and to align those
climate sectors identified as most material regarding lending,
which is our most material financial activity.
Regarding our own operations, we disclose our direct and indirect
emissions (scopes 1, 2 and 3) data as well as other climate-
relevant metrics such as energy consumption. We report on our
targets for renewable electricity 17 and the compensation of our
scope 1 and scope 2 emissions. Since 2021, we have also been
disclosing financed scope 3 emissions (category 15) related to our
alignment objectives.
We announced our ambition to work to achieve net zero carbon
emissions by 2050 in February 2021.
We are constantly reviewing our strategy and targets to
incorporate the latest science insights and changes in local
regulation.
We use internal methodologies that take input and
recommendations from the NZBA (Net Zero Banking Alliance)
guidelines, the PCAF standard, Glasgow Financial Alliance for Net
Zero (GFANZ) publications, the Science Based Targets initiative
(SBTi) and other references. We also use external data and models
from third parties with recognized market reputation and
expertise. We rely on financial and non-financial information from
our customers.
Though the non-financial information required is becoming more
available as more companies begin to report GHG emissions, it still
falls short in certain sectors and regions. And, where available, it
might not be the most suitable or accurate. In many cases, data is
only available with a significant time lag. If no emissions data exist,
we estimate them based on a proxy (average emissions by
industry, country, etc.). Once we obtain our customers' total
emissions, we apply our attribution factor in line with the PCAF
approach to determine Santander’s financed emissions.
2.4.1 Alignment targets
As part of our climate ambition, we prioritize the high-emitting
sectors (which also bear high and very high transition risk
according to our climate materiality) to which we have material
exposure and must support the transition to a low-carbon
economy.
In 2021 and 2022 we set targets for the wholesale segment in the
power generation, thermal coal, oil & gas, aviation, and steel
portfolios. In 2023, we focused on the automotive sector from two
perspectives: auto manufacturing (wholesale segment) and auto
lending (consumer loans for the purchase of passenger cars in
Europe).
Within the sectorial climate approach described above, cement,
shipping and aluminium are deemed not material given their low
level of exposure. Agriculture, mortgages and commercial real
estate (CRE) are considered material in the retail segment.
We are monitoring the materiality of the capital markets emissions
(facilitated emissions) for the bank, and for the moment we
consider them not material.
The climate performance dynamics of all these sectors are heavily
dependent on their regulatory and policy framework, technology
changes and customers behaviours. For example, the International
Energy Agency (IEA) estimates that one third of the reductions
needed to meet the Paris objectives need to come from
technologies that are currently at the demonstration or prototype
phase.
In sectors where corporate clients are making progress, we have
set targets while acknowledging these external dependencies.
For the sectors that are heavily dependent on further regulation to
align, and where most of the customers are retail, we are
monitoring their alignment; but we will refrain from setting targets
until the regulatory and policy framework is clear, consistent and
supportive of consumer behaviour changes.
We have been sharing our understanding and experience of these
policy gaps with authorities and other sectors, and plan to keep
doing so. Given our footprint, we see markedly different regulatory
frameworks in the regions where we operate.
Governments' approach to the transition should reflect several,
simple points. First, economic growth is essential to finance the
transition - and to ensure it is affordable and fair in both developed
and developing economies. Policies to support the transition
should, therefore, not undermine growth, nor the provision of
reliable and affordable energy. Next, we believe the transition is a
journey – not a moment in time – for companies, sectors and
countries and that governments' policies or regulations to affect
sudden change are therefore likely to undermine growth and
decrease investor confidence. Third, a “one size fits all approach” to
the transition ignores the economic, social and political reality
facing different sectors in different regions and we need a more
pragmatic, flexible approach to support green growth. Finally, the
financial sector should be considered as an enabler of the
transition, but not as the solution.
We believe governments' policies for the transition should reflect
this by establishing clear policy pathways for critical sectors to
achieve a low-carbon economy, with measures and incentives to
support businesses' transition. Frameworks should be transparent
and provide certainty for each sector. Today, according to IEA, there
is still a large gap between the Stated Policies Scenario 18
projections and Net Zero Emissions by 2050 Scenario. This gap also
exists in Santander's core markets.
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Our efforts to pursue our transition targets also involve engaging
with public bodies whose policy decisions and actions are critical if
companies - including banks like Santander - are to make progress
towards net zero carbon by 2050. If policies (or the lack of them)
remain as they are today, a significant gap will persist between net
zero scenario pathways and what will actually happen.
We also monitor technological, economic and geopolitical factors
that bear on transition, from energy security to variability in
approaches in different markets, including those in which we
operate.
Our aim is to help our customers transition and contribute to their
alignment, while understanding the constraints and limitations
they may face in different jurisdictions and the gaps that make
setting targets in certain sectors unfeasible. Weighting the E, the S
and the G appropriately across our strategy is key to avoid
undermining other ESG goals, while we pursue tackling climate
change. The transition must be just and orderly.
Emissions accounting and science-based alignment target
methodologies are still relatively new areas that are improving
quickly to meet climate ambitions. More methodologies need to be
developed so that all financial institutions have the right tools to
effect positive change in the economy.
We set our alignment targets and monitor the most crucial part of
each sector’s value chain, focusing on those that are most
emissions-intensive, actionable and where progress can be
measured as well as considering the availability of quality data and
market practices.

Alignment targets |
Sector | Scenario | Metric | Baseline | 2020 | 2021 | 2022 | 2023 | 2030 targets | Scope of emissions | Value chain in scope |
| Power generation | IEA Net Zero 2050 | tCO 2 e/ MWh | 0.21 (2019 baseline year) | 0.17 | 0.19 | 0.16 | 0.15 | 0.11 (-46%) | 1 | Upstream / Generation | } | Midstream / Distribution | } | Downstream / End product | }
| Oil & gas | mtCO 2 e | 23.84 (2019 baseline year) | 22.58 | 27.43 | 20.94 | 20.27 | 16.98 (-29%) | 1 + 2 + 3 A | Integrated / Diversified | }
Upstream / Extraction | } | Midstream / Distribution | } | Downstream / Trading | }
| Aviation | gCO 2 e/ RPK | 92.47 (2019 baseline year) | 93.05 | 97.21 | 81.09 | 82.99 | 61.71 (-33%) | 1 + 2 | Upstream / Suppliers | } | Midstream / Manufacturing | } | Downstream / Airliners | }
| Steel | tCO 2 e/ tS | 1.58 (2019 baseline year) | 1.40 | 1.36 | 1.24 | 1.38 | 1.07 (-32%) | 1 + 2 | Upstream / Materials extraction | } | Manufacturing | } | Downstream / End product | }
| Auto manufacturing | gCO 2/ vkm | 149 (2020 baseline year) | 149 | 138 | 133 | 134 | 103 (-31%)B | 3 A | Upstream / Suppliers-Materials | } | Midstream / Manufacturing | } | Midstream / Dealers | } |
| Auto lending Europe C | gCO 2 e/ vkm | 137 (2022 baseline year) | N/A | N/A | 137 | 133 | 75-89 (-35-45%) | 1 + 2 |  |  |  |  |  |  |  |  |  | Downstream / End-users | }
| Thermal coal | 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. |
Details on targets' scope are available in the following pages. |

Monitoring of other portfolios |
Sector | Absolute emissions (2023) | Scope of emissions | Value chain in scope |
| Commercial Real Estate | 0.19 mtCO 2 e D | 1 + 2 | Upstream / Suppliers | } | Midstream / Construction | } | Downstream / Owners | }
| Mortgages | 1.93 mtCO 2 e E | 1 + 2 | Upstream / Suppliers | } | Midstream / Construction | } | Downstream / Homeowners | }
| Agriculture | 9.83 mtCO 2 e F | 1 + 2 | Upstream / Suppliers | } | Midstream / On Farm | } | Downstream / End product | }
Details on our progress on alignment available in the following pages. |

| Part of the sector value chain in-scope, due emissions materiality and/or actionability |  |  | Part of the sector value chain out of scope

A. Use of sold products.
B. Target reduction is -25% vs. 2021 reference.
C. Consumer lending for acquisition of passenger cars, covering a significant majority of the exposure in Europe.
D. Financed emissions of the UK and Spain CRE portfolios.
E. Financed emissions of the UK and Spain mortgage portfolios.
F. Financed emissions of part of the Brazil agriculture portfolio.

| For more details on our alignment targets, see note SN 4. 'Our transition plan'.

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CIB implementation strategy
As part of supporting our customers in their climate objectives and
to achieve our sectoral alignment targets we undertake several
actions. These actions include an assessment of the transition
plans of our customers, customer engagement, and dedicated
portfolio steering governance. We also leverage on data collection
as part of the risk analysis process; as well as conducting ESCC
exclusion policy reviews. Given our actions directly relate to the
activity of our customers, it is not practical to make quantitative
estimates for how each action contributes to achieving each of our
targets. All actions described below cover the CIB business
globally.
Customer Climate Tiering
A key element of our implementation strategy is the customer
climate tiering approach. The outcome of this tiering approach is an
assessment of our customers’ current and expected progress to
align with our climate sector objectives. In 2024 we implemented
this approach for Automotive Manufacturing, in addition to existing
target sectors (power, oil & gas, steel and aviation), and adapted it
where necessary to account for sector differences. We review the
climate tiering assessment for each sector every year to reflect our
customers’ progress.
Our approach aims to facilitate the achievement of our emissions
targets and to develop a strong understanding of our customers’
transition strategies towards low-carbon business models. This
approach is supported by governance processes, involving various
internal stakeholders, such as front office teams, risk reporting
functions, and senior management to guide the potential portfolio
steering actions (for more details, see the Portfolio Steering
section below). It is structured around four main iterative steps:
Collect, Assess, Engage and Review. We have used various
internationally recognized references and the Cambridge Institute
for Sustainability Leadership (CISL) 'Let's Discuss Climate' guide as
inputs and adapted them to our requirements and objectives.
Collect: We collect relevant information as part of regular
customer dialogue and engagement. In addition, we source specific
climate related information through tailored requests that contain
transition-focused elements designed to help us better understand
companies’ alignment strategies. Furthermore, we also seek to
source reliable and consistent information from credible third
parties to complement our understanding.
This information is collected and updated both at the customer
onboarding stage, and as part of the regular business and risk
assessment review with each customer, which is performed at
least once a year.
Assess: Our assessment consists of a two-step approach designed
to categorize our customers according to their emissions pathway
and perceived quality of their transition strategy.
The first step involves assessing how our customers’ emissions
trajectory aligns with our current sectoral portfolio baseline and
future sectoral portfolio targets. The second step assesses the
quality of each customer’s transition plan. Our transition plan
assessment methodology focuses on four pillars:
1. Targets: it focuses on the quality and ambition of the customer’s
quantitative GHG emissions targets. Where possible, we assess
short- and long-term, as well as absolute and intensity
reduction targets.
2. Action plan: it considers the credibility of the customer’s
alignment strategy. We assess the business strategy integration
of climate change risks and opportunities; the existence of
climate scenario planning; as well as time-bound action plans to
achieve alignment targets.
3. Disclosure: it focuses on the transparency of reporting on
historical emissions performance across all relevant scopes, the
level of assurance, as well as the degree of reporting alignment
with the TCFD. Where possible, it also includes assessing
whether or not previous GHG emission targets were achieved.
4. Governance: it considers the level of management oversight
and governance of the customer’s transition strategy. We
assess the level of seniority of executives accountable for
climate strategy, board committee oversight of climate change
issues, and whether executive remuneration is linked to climate
change performance.
We draw on established transition plan assessment
methodologies, such as the Transition Pathway Initiative (TPI),
CDP, ACT (Assessing Low Carbon Transition), TCFD, as well as other
related initiatives including the UK’s Transition Plan Taskforce
(TPT).
Our transition plan assessment methodology includes higher
weightings for assessment criteria deemed to be critical to credible
transition plans, compared to lower weightings for those that are
considered supporting criteria. The more highly weighted criteria
are designed to prioritize focus areas for customer engagement.
Ultimately, our customer climate tiering system leads to four
categories (Leader, Strong, Moderate and Weak).
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Two-step tiering system
GHG emissions profile alignment |  | • Current GHG emissions profile • Future targeted GHG emissions trajectory • Assessment of alignment with Santander’s pathway
↓ |  |
Transition plan quality assessment |  | • Internal methodology to assess perceived quality of transition plans • Developed using established transition plan assessment methodologies

Transition Pillar |  | Overview
1. Targets |  | Quality and ambition of quantitative targets to reduce GHG emissions
2. Action plan |  | Depth of alignment strategy to achieve GHG emissions reduction targets
3. Disclosure |  | Transparency on GHG emissions reporting across relevant scopes
4. Governance |  | Management oversight and governance of transition strategy

Tier Categories |  | Description
Tier 1 |  | Leader |  | • Emissions profile fully aligned with Santander’s pathway • Strong transition plan
Tier 2 |  | Strong |  | • Emissions profile fully aligned with Santander’s pathway but improvement needed in transition plan; or • Strong transition plan but emissions profile partially aligned with Santander’s pathway
Tier 3 |  | Moderate |  | • Emissions profile partially aligned with Santander’s pathway, but improvement needed in transition plan; or • Emissions profile not aligned with Santander’s pathway, but strong transition plan
Tier 4 |  | Weak |  | • Emissions profile not aligned with Santander’s pathway • Weak transition plan

Internally organized training sessions were delivered to sector-
specific relationship managers and Environmental Social Climate
Change Risk (ESCC) analysts. These focused on gathering
information to complete the transition plan quality assessment
(the second step in our customer climate tiering system). These
sessions were delivered by senior experts from our ESCC, Portfolio
Alignment and Sustainability Solutions teams.
Expert resources from our global Sustainability Solutions team are
made available for further education and advice on customers'
transition plans assessment.
Engage with customers: Our customer climate tiering system
seeks to facilitate tailored transition dialogue to help lower-tiered
customers move up to higher tiers over time.
In 2024, we focused our customer engagement efforts on oil & gas
as well as lower-tiered customers in other sectors. We developed
internal transition assessment dashboards for relationship
managers, designed to aid the identification of customer-level
priority areas, industry benchmarking, and opportunities to support
our customers in financing their transition. Of the customers that
are in scope of our targets, approximately three quarters included
sustainability-related discussions in 2024.
In addition, on a wider scope of climate-related topics, we are
engaging with various public and private organizations (for more
details, see section 1.2 ‘Stakeholder engagement’).
Review: The customer transition plan assessment is performed by
relationship managers, in cooperation with ESCC risk analysts,
followed by portfolio level reviews by Sustainability Solutions and
Portfolio Alignment teams to determine final tierings. The portfolio
level review is important to help identify key trends and challenges
in each sector, as well as for future transition plan assessment
methodology improvements.
Initial assessments were completed for both steps for all sectors
where targets have been set. Subsequently, transition plan quality
assessments were reviewed and enhanced, drawing on updated
reference methodologies and sector-specific research. This led to
improved guidance, more focused set of questions and the
inclusion of additional sector- specific questions for assessing
transition plan quality.
The figure below shows the breakdown of our climate tiering
system output for all entities in scope of our original sector targets,
by sum of drawn exposures as of the end of 2024. See 'Sector
Considerations' section for further details on each sector’s portfolio
composition and evolution.
Climate tiering aggregated for the sectors for which we had
set targets A
A. Based on 2024 year-end drawn exposure, according to portfolio alignment
methodology, and including project finance, both in operation and under
construction.
Of our corporate customers with drawn exposure where transition
plan assessments were conducted in 2024, approximately:
• two-thirds have set quantitative emissions reduction targets on
sector-material GHG scopes between 2030 and 2039;
• one-third have set, or committed to set, science-based targets
(SBTi), if available for the sector;
• over two-thirds have a time-bound action plan to align their
business, with almost half providing details of the expected
proportional impact of different alignment levers, according to
our assessment;
• over half provide details or commitments for CAPEX alignment
with future low-carbon solutions;
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• over two thirds undertake some form of climate scenario
planning; and
• over half have senior management remuneration linked to
progress towards achieving their GHG emissions reduction
targets.
Portfolio steering
CIB’s portfolio steering governance is designed to identify actions
to support our customers’ transition and manage our portfolio to
achieve our climate targets. A quarterly portfolio steering meeting
operates at the core of our governance. Its scope includes
monitoring progress towards the achievement of our portfolio
targets. All relevant CIB functions are represented at this meeting.
In addition, a monthly portfolio alignment meeting provides
technical support by reviewing methodologies and monthly critical
KPI performance.
Our risk appetite and lending policies are important tools for
monitoring and steering the portfolio towards our financed
emissions targets. Our customer climate tiering assessment
informs our risk appetite for each sector where targets have been
set, e.g., new lending business with lower tier customers might be
limited when the sector deviates from the 2030 target.
In addition, Santander’s Environmental, Social and Climate Change
(ESCC) Risk Management Policy sets out the criteria for providing
financial products to customers involved in several of the sectors
within the scope of our financed emissions targets (i.e., power, oil
& gas, metals & mining and soft commodities). For all sectors with
alignment targets, customer climate tiering and engagement
considerations are being incorporated into annual credit risk
reviews. For one-off transactions (e.g., project finance
transactions), we assess a transaction’s impact on the relevant
sector’s portfolio financed emissions targets.

|  | Contributing to integrity in transition finance |
| We continue to contribute to furthering knowledge of transition finance as a key enabler towards net zero. As part of our long-standing support for education, employability and entrepreneurship, we are collaborating with the University of Oxford to fund the development of a Transition Finance Centre of Excellence. This centre aims to play a prominent role in defining aspects of transition finance, such as best practice sectoral transition plans and new tools and insight for practitioners. Initial research has focused on developing a deeper understanding of assessing companies’ transition plans |  | in emission-intensive sectors. Follow up work has explored external dependencies in corporate transition plans and assessing transition plans with more granular asset-based approaches. Research has also included corporate net zero transition plan implications for loan pricing, the development of tools to assess sustainability-linked bond pricing (given the dynamic nature of sustainability performance indicators), and other topics. For more details about this collaboration and published research, visit smithschool.ox.ac.uk. |

Sectorial considerations
Power generation
Sector boundaries: For the power generation sector, we assess the
upstream/generation business in the value chain. Our portfolio
includes both corporate customers and project finance
transactions.
Industry dynamics: The industry is reducing carbon intensity by
building renewable power plants, switching off coal power plants
and using combined cycle power plants as transition technology.
Some countries also invest in nuclear power as a low-carbon
electricity source. The IEA estimates that to meet the Paris
objectives, investment in clean energy will need to almost triple
from current levels to around 4.5 trillion USD a year by the early
2030s.
Portfolio composition: The exposure to project finance (both in
operation and under construction) outweighs the exposure to
corporate customers. Within the corporate portfolio, around 80%
of the portfolio is classified as tier 1 and 2 customers, typically
leading power companies with existing or strong objectives to
renewables. We observe clear regional differences in the climate
tiering (with Europe being the leader), while many emerging
market entities are still developing and disclosing their transition
plans.
Power Generation portfolio distribution A
A. Based on September 2024 drawn exposure, according to portfolio alignment
methodology, and including corporates and project finance, both in operation and
under construction.
Portfolio evolution: Since 2022, we observe a downward trend in
the physical emission intensity of our portfolio, going from 0.19
tCO 2 e/MWh in 2021 to 0.16 in 2022 and 0.15 in 2023. One of the
main drivers is an overall improvement in the average emissions
intensities of our corporate portfolio customers during this period.
Supporting our clients in their alignment journey implies investing
in both renewable technologies and transition technologies, which
may still lead to temporary increases in physical emission intensity
in the future.
19 Scope 1 and 2 are directly retrieved from Wood Mackenzie. Scope 3 is calculated based on Wood Mackenzie production data and combustion emission factors.
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Sector | Year | Exposure (drawn amount EUR bn)A | Absolute emissions (MtCO 2 e) | Physical emissions intensity (MtCO 2 e/MWh) | Financial emissions intensity (MtCO 2 e/ EUR bn lent) | PCAF score | 2030 target
Power generation | 2019 | 10.66 | 5.41 | 0.21 | 0.51 | 2.7 | 0.11 tCO 2 e/ MWh
2020 | 10.31 | 4.59 | 0.17 | 0.45 | 2.5
2021 | 10.23 | 4.24 | 0.19 | 0.41 | 2.8
2022 | 11.88 | 3.82 | 0.16 | 0.32 | 3.0
2023 | 10.75 | 3.14 | 0.15 | 0.29 | 3.2

A. It includes Corporates and Project Finance in operation.

Oil & gas
Sector boundaries: For the oil & gas sector, we assess upstream
companies, as well as integrated companies undertaking their own
upstream production in oil and gas.
Industry dynamics: Oil & gas companies can reduce their
emissions by reducing operational emissions (e.g. by reducing
flaring and leakages), by shifting their production to less GHG
intensive fuels (e.g., from oil to gas), by investing into CCUS
(Carbon Capture, Utilisation and Storage) or by diversifying from
fossil-fuel combustion related business (e.g., into renewable
energy).
2024 saw a number of elections held in major economies. It
remains to be seen how the outcome of these elections will affect
energy supply and demand. As ever, energy security remains a
critical theme for the sector.
Portfolio composition: To differentiate between oil & gas entities
on a sector specific basis, we apply a physical emissions intensity
comparison and a 2050-time horizon for our climate tiering
analysis in this sector only.
Portfolio evolution: The absolute financed emissions of our
portfolio decreased significantly in the years 2022 and 2023, going
from 27.43 MtCO 2 e in 2021 to 20.94 and 20.27 in 2022 and 2023
respectively. This was primarily led by the decrease in the exposure
to some low-tiered carbon-intensive clients.

Sector | Year | Exposure (drawn amount EUR bn) | Absolute emissions (MtCO 2 e) | Physical emissions intensity (tCO 2 e/TJ) | Financial emissions intensity (MtCO 2 e/ EUR bn lent) | PCAF score | 2030 target
Oil & gas | 2019 | 7.68 | 23.84 | 73.80 | 3.10 | 3.4 | 16.98 mtCO 2 e
2020 | 6.67 | 22.58 | 73.60 | 3.38 | 3.6
2021 | 8.25 | 27.43 | 74.36 | 3.33 | 3.9
2022 | 6.89 | 20.94 | 73.28 | 3.04 | 3.0
2023 | 6.82 | 20.27 | 72.97 | 2.97 | 3.0

Note on data quality: To improve the quality of timely available data, the data source for this sector has been replaced by Wood Mackenzie for figures from 2022 onwards,
allowing us to analyse upstream companies and their assets in a more granular way and avoid uncertainties related to public company disclosures. Our methodology has been
updated to incorporate this refinement 19.
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|  | Our role in supporting the energy transition |
| The world needs to ramp up renewable energy capacity to align the economy. For the global energy sector to align, all energy-intensive sectors and activities must be transformed. Our role is to support our customers’ transition and, as one of the world’s top lenders in renewable energy, we’re increasing the volume of green finance to support this transformation. |  | Fossil fuels continue to meet the vast majority of global energy demand. Energy security remains key for an orderly transition. As a bank, we believe our role is to work with clients to support and encourage their transition.

Aviation
Sector boundaries: For the aviation sector, we focus on
commercial passenger airlines which include both general purpose
lending and aircraft-specific financing. CIB refined the
methodology for the latter for 2022 and 2023, as a result of the
availability of a new specialized data source that allows the
calculation of emissions at the asset level.
Industry dynamics: The IEA's updated Net-Zero by 2050 Scenario
lowers expectation on emissions reductions in the sector due to the
current trends for sustainable aviation fuel (SAF) – high costs and
availability issues - as well the slow adoption of efficiency
measures such as fleet renewal or use of lighter materials, raising
concerns over whether the sector can reach its current 2030
targets.
Portfolio composition: The exposure to this sector reduced
significantly from its peak in 2020 until 2023, driven in particular
by repayments from better climate tiered customers. Current
exposure is significantly below the initial level at the time of target
setting, and is very much concentrated in a small number of
customers and long-term asset financing.
Portfolio evolution: Emissions intensity decreased from 97.21
grCO 2/RPK in 2021 to 81.09 in 2022 due to COVID-19 recovery and
increased to 82.99 in 2023 driven by changes in the portfolio
composition (repayments from less carbon-intensive clients). The
emission intensities of individual airlines continue to decline as
airlines improve their efficiency, in addition to a normalization
effect post-COVID in 2022. It is worth noting that absolute
financed emissions have reduced by almost 70% since the baseline
year 2019.

Sector | Year | Exposure (drawn amount EUR bn) | Absolute emissions (MtCO 2 e) | Physical emissions intensity (gCO 2 e/RPK) | Financial emissions intensity (MtCO 2 e/ EUR bn lent) | PCAF score | 2030 target
Aviation | 2019 | 1.55 | 1.81 | 92.47 | 1.17 | 3.3 | 61.71 gCO 2 e/RPK
2020 | 2.44 | 1.08 | 93.05 | 0.44 | 3.7
2021 | 2.02 | 0.84 | 97.21 | 0.42 | 3.2
2022 | 1.65 | 1.35 | 81.09 | 0.82 | 3.0
2023 | 0.70 | 0.58 | 82.99 | 0.83 | 3.0

Steel
Sector boundaries: For the steel sector, our analysis covers
companies that attribute over 10% of their revenue to steel
production.
Industry dynamics: The main alignment levers for the steel
industry are: shifting to low-carbon energy sources, -e.g.
renewable energy or hydrogen-, technological improvements, –
e.g. electric-arc-furnaces (EAF), carbon capture, - and material
efficiency and recycling. The latest report by Global Energy Monitor
(GEM) shows that 43% of planned steelmaking capacity is now
based on electric arc furnace (EAF) technology, while 57% would
use coal-based blast furnace-basic oxygen furnaces (BF-BOF).
According to IEA, the direct CO 2 intensity of crude steel production
has decreased slightly in the past few years. However, efforts will
likely still need to be accelerated to align with Net Zero Emissions
by 2050 scenarios.
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Portfolio composition: Availability of reliable data has improved
since our last report, although there are still gaps in certain
regions. We employ a conservative approach by assigning all
customers with insufficient data to the lowest climate tier. This is
a small and concentrated portfolio, where small changes in
composition have a noticeable impact on the overall emission
intensity.
Portfolio evolution: The reduction in emission intensity from 1.36
to 1.24 tCO 2 e/tS from 2021 to 2022 was mainly due to the increase
in exposure to less carbon-intensive customers. In 2023, this effect
reversed which is the main driver for the increase to 1.38 tCO 2 e/tS.
However, we also observed that some clients increased their
individual emission intensity.

Sector | Year | Exposure (drawn amount EUR bn) | Absolute emissions (MtCO 2 e) | Physical emissions intensity (tCO 2 e/tS) | Financial emissions intensity (MtCO 2 e/ EUR bn lent) | PCAF score | 2030 target
Steel | 2019 | 1.51 | 2.62 | 1.58 | 1.74 | 3.0 | 1.07 tCO 2 e/tS
2020 | 1.31 | 2.14 | 1.40 | 1.63 | 3.1
2021 | 1.42 | 1.90 | 1.36 | 1.33 | 3.1
2022 | 1.96 | 1.88 | 1.24 | 0.96 | 3.1
2023 | 2.04 | 1.84 | 1.38 | 0.90 | 3.3

Automotive sector
The automotive sector is one of the key sectors to tackle in the
transition to a low-carbon economy.
According to the IEA, road transport accounts for over 15% of
global energy-related emissions. The switch from internal-
combustion engines (ICE) to electric vehicles (EV) and plug-in
hybrid electric vehicles (PHEV) is the most important alignment
lever for this sector.
We are supporting our auto-manufacturer customers in the
adaptation of their business models and product offering towards
EVs and PHEVs. As a leading auto end-user lender in Europe, we
are also helping our retail customers finance purchases of an
increasing number of EVs and PHEVs.
We aim to align our global auto manufacturing and European auto
lending loan portfolios, with a 2030 target and a 2030 target-
range, respectively. Our approach is heavily dependent on
supportive public policy frameworks that stimulate consumer
demand.
Auto manufacturing
Sector boundaries: Within the automotive sector, CIB focusses on
the manufacturing of passenger cars, i.e. on Original Equipment
Manufacturers (OEMs). The target metric is scope 3 GHG emissions
from OEMs, measured by the average CO 2 intensity per vkm of the
fleet sold in the given year.
Industry dynamics: The switch from ICE to EV and PHEV is the
most important alignment lever for this sector. The uptake of these
technologies depends on multiple external factors.
Portfolio composition: The exposure remains stable at EUR bn
4.02. There are no significant changes in the portfolio composition
in 2022 and 2023 compared to 2021. Aside from pure EV
manufacturers, the carbon intensities of the OEMs’ fleets are
within a relatively narrow band compared to other industries.
Portfolio evolution: The emission intensity improved from 138
gCO 2 e/vkm in 2021 to 133 in 2022, mainly due to an overall
average reduction in the emissions intensity of our customers
during this period. This reduction continued in 2023, although the
emissions intensity increased slightly to 134 gCO 2 e/vkm due to
minor portfolio exposure changes.

Sector | Year | Exposure (drawn amount EUR bn) | Absolute emissions (MtCO 2 e) | Physical emissions intensity (gCO 2/vkm) | Financial emissions intensity (MtCO 2 e/ EUR bn lent) | PCAF score | 2030 target
Auto manufacturing | 2020 | 4.45 | 3.49 | 149 | 0.79 | 3.1 | 103 gCO 2/vkm
2021 | 3.90 | 2.67 | 138 | 0.68 | 3.0
2022 | 3.95 | 2.74 | 133 | 0.70 | 3.0
2023 | 4.02 | 2.74 | 134 | 0.68 | 3.0
Auto lending Europe | 2022 | 55.27 | 5.84 | 137 | 0.11 | 3.2 | 75-89 gCO 2 e/ vkm
2023 | 62.40 | 6.78 | 133 | 0.11 | 2.7

The data source for auto manufacturing has been replaced by JATO Dynamic for figures from 2022 onwards, allowing us to provide more accurate and timely data points.
Accordingly, the methodology has been updated to incorporate this refinement.
Auto lending in Europe
Industry dynamics: The alignment of this sector in Europe is driven
by regulation and is especially affected by a law that prohibits the
sale of internal combustion engine vehicles from 2035.
Nonetheless, the rate of alignment will rely on external factors
such as government action (e.g. subsidies for electric or low-
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emissions vehicles), the development of charging infrastructure
and manufacturers’ business objectives.
Portfolio evolution: 2023 emissions were 2% below the lower end
of the target curve. Once we finish automating calculations, we
will monitor all emissions-related metrics (total emissions,
emission intensity, auto lending portfolio exposure, PCAF score,
etc.) monthly.
To support the alignment of the auto lending portfolio SCF plans
to:
• Enter into new agreements and build on existing agreements
with electric vehicle manufacturers.
• Renew and build on existing agreements with traditional
manufacturers that have ambitious electric vehicle transition
targets.
• Offer additional bundles of financial products and solutions for
electric vehicles (e.g. installation and financing of home
chargers, solar panels, etc.).
• Implement new risk management methodologies for electric
vehicles — residual value risk products to support the sale of
electric vehicles under our agreements with manufacturers.
The success of these actions depends entirely on electric vehicle
demand and regulation as well as manufacturers’ transition plans,
not to mention such other external factors as technology,
infrastructure, government incentives and tariffs on electric
vehicles. SCF aims to follow general market trends and help
finance electric vehicles according to the transition to this vehicle
type.
SCF is working on automating the emissions calculations. The
Responsible banking, Business, ESG risk and other teams are
monitoring action plans and emissions performance, while
commercial teams are performing actions to support alignment
plans. Estimating the present and future resources needed to carry
out our action plan is no easy task given the organizational
complexity and scope of targets (13 countries, 16 units and many
areas involved).

|  | Progress on both automotive sector portfolio targets will depend on several external factors such as: |
| • Regulation and policy: Effective government measures and policies are needed to reach the EV sales and alignment levels that the net zero scenario requires. European countries will need to meet the timelines set to end sales of new ICEs. The introduction of low emissions zones would support this change. Further adoption of subsidies on EV purchases will be key to drive up penetration, as we have seen in the Nordic countries. • Technology: A guaranteed supply of the required materials to produce EVs and PHEVs at scale is needed to match demand. Also, reducing EV and PHEV production costs is required to ensure affordability in comparison with the less clean alternatives (ICEs), and thus ensure a just transition. |  | • Infrastructure: Reaching a high penetration of EVs and PHEVs will require a deep transformation of supply chains and the infrastructure that powers them (increasing the number of charging points and their performance) to shift from a model of predominantly ICE cars to an EV and PHEV majority. The investment needed for this infrastructure will require support from governments and other actors, which could be affected by conflicting interests such as energy security. • OEMs commitments: For electric vehicles to become the market’s number one engine type, manufacturers must fulfil their commitments regarding their development and the phasing out of combustion engines. |

Thermal coal phase-out
Sector boundaries: For the thermal coal target, we assess
customers for whom coal fired power generation represents
directly more than 10% of revenues on a consolidated basis; and
customers that own thermal-coal mines worldwide.
Industry dynamics: Power utilities can reduce their usage of
thermal coal power plants by replacing them with other
technologies, e.g. CCGT (Combined Cycle Gas Turbine) or
renewables. Thermal coal miners can either responsibly divest
their mine or run down their mining activity, eventually closing the
mine sustainably. According to EIA (Environmental impact
assessment), record highs have been reached in 2023 as a
consequence of the Covid-19 recovery, Ukraine's conflict and the
continuous growth of Indian and Chinese demand. The substitution
of coal by other sources of energy, such as electricity, bioenergy or
natural gas is expected to accelerate in the later years of this
decade.
Portfolio composition: Most of our customers in this group already
have plans in place to comply with our policy in 2030.

Sector | Year | Exposure (drawn amount EUR bn)
Thermal coal-related power & mining phase out (EUR bn) | 2021 | 7.0
2022 | 5.9
2023 | 4.9
2024 | 4.8

Portfolio evolution: We have been continuously reducing our
exposure to thermal coal customers in scope of our target. Many of
our customers will need financing to transition away from coal.
Transition finance support to these entities may, therefore,
temporarily increase before declining over the longer term as we
aim to achieve our targets.
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2.4.2 Monitoring of other portfolios
Further to the five existing alignment targets published in 2021,
and the two new targets in the automotive sector in 2023, in 2024
we also worked on monitoring the alignment of other climate-
relevant portfolios including mortgages (in the UK and Spain),
commercial real estate (in the UK and Spain) and agriculture (in
Brazil). The selection of sector portfolios for this exercise
considered their materiality both at Group and country level within
the sectorial climate approach.
The objective of these portfolio assessments is to understand the
level of financed emissions in each case, identify levers to drive
alignment and understand their feasibility.
The exercise comprised baseline-financed emissions calculations;
expected trajectory towards 2030; internal and external alignment
levers analysis (considering supply and demand, the regulatory
framework and support for sector alignment); internal governance
to monitor each portfolio’s alignment progress; and identification
of commercial opportunities and initiatives to improve data quality
to help align the customers of these portfolios. Further details on
the Spain and UK mortgage, and Brazil agriculture exercises are
provided below.
Agriculture
The agribusiness sector accounts for over 25% of Brazil’s GDP
(Gross Domestic Product). Measuring the sector's financed
emissions is challenging. Agriculture comprises a complex and
extensive value chain, with varying sources, types and quantities of
GHG emissions. Moreover, agriculture practices and emissions vary
depending on the commodity, management techniques,
geographic location, high portfolios turnover (for instance only 5%
of our 2022 portfolio remained active in 2023) and other factors.
Our measurement focuses on emissions from primary production
activities in the agribusiness sector within Santander Brasil's retail
portfolio. The emissions from primary production are unique to the
agricultural sector, being under its direct management, and
represent a significant portion of the GHG emissions in the
agribusiness value chain. Our initial assessment covered scope 1
and 2 emissions originating from farm-gate activities and the land
use change (LUC) associated with farmland. Guidelines for setting
net zero targets in the agricultural sector are still under
development. To overcome the lack of methodology, Santander
Brasil, in collaboration with WayCarbon, estimated its financed
emissions based on the project finance asset class category from
the PCAF, the GHG Protocol Agriculture Guideline, and Brazil’s
Fourth National Inventory.
Santander Brasil’s on-balance credit exposure to farms with
primary production was EUR 3.58 bn in December 2023. We
estimated financed emissions from that portfolio amount to 9.83
mtCO 2 e/year: c.80% estimated for land management, c.20% for
LUC emissions (considering 20-year legacy), and less than 1% for
energy consumption. The PCAF quality score is 3.1.
LUC emissions are mainly the result of illegal deforestation in
Brazil, and, as mentioned before, a significant part of the illegal
deforestation is driven by property speculation in public lands.
Santander Brazil has been implementing a robust monitoring
system that uses satellite imagery to monitor and detect illegal
deforestation in all financed farms and farms used as guarantees.
We go above and beyond the local legal requirements and
detecting illegal deforestation before the government had issued
embargoes in those properties. This benchmark practice allow us
to avoid being involved in financing illegal deforestation in our
agriculture portfolio (see more details in ‘Santander and the
Brazilian biomes’).
Our approach to support alignment leans towards a low-carbon
agriculture portfolio. It includes:
• helping customers build a low-carbon agriculture future though
green finance solutions and innovative financial transactions;
• engaging with the government and local and global forums to
share methodologies, open the broader debate to improve data,
and accelerate alignment in agriculture; and
• contributing to the Banking for Impact on Climate in Agriculture
(B4ICA) initiative, led by the World Business Council for
Sustainable Development (WBCSD), through the development of
methodologies to guide the sector in the transition to a low-
carbon economy.
Commercial real estate alignment
For the commercial real estate sector we have been progressing in
our alignment analysis, starting with the most material portfolios
with enough information available, the UK and Spain. We are not
setting an alignment target for this sector. As already explained, it
is heavily dependent on further regulation to align. We have
assessed what the 2030 alignment point would be according to the
latest available IEA - Net Zero scenario: 12.8 kgCO 2 e/m 2.
Commercial real estate and mortgage in Spain
Santander España has been monitoring emissions from the
residential mortgage portfolio since 2021 and for the commercial
real estate (CRE) portfolio since 2022.
80% of Spain’s properties do not have an energy performance
certificate (EPC). This makes harder to calculate financed
emissions.
Since 2020 we have enhanced data availability by:
• Requesting an EPC as part of new loan applications.
• Purchasing databases from an external provider with all
available registers in Spain.
• Estimating non-existent EPCs using an internal, machine learning
model that includes such variables as year of construction,
climate zone, building type and property register information.
By doing this, we obtained actual or estimate EPCs for the entire
real estate p ortfolio.
To calculate emissions, we use the Partnership for Carbon
Accounting Financials (PCAF) methodology, with the Carbon Risk
Real Estate Monitor initiative (CRREM) emissions factors from the
PCAF database, for each EPC.
Our residential portfolio, w hich amounts to EUR 60.49 bn, has an
emissions intensity of 21.41 kgCO2e/m² and a PCAF score of 4.0.
Our CRE portfolio, with a scope of EUR 7.22 bn, has an emissions
intensity of 20.02 kgCO2e/m² and a PCAF Score of 4.0.
This methodology was ratified by a specialist consultancy firm and
the results audited both internally and externally.
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Local and global governance forums, including the Santander
España board of directors, regularly monitor these results.
This enables us to gain a greater understanding of our portfolios to
monitor their performance and set actions in motion to align the
least energy efficient buildings.
The alignment of these portfolios stems from progress in achieving
government plans such as the rollout of renewable energy in the
domestic energy mix and the alignment targets set out in Spain’s
National Energy and Climate Plan (PNIEC) and its long-term
strategy for energy efficiency through the renovation of real estate
(ERESSE). Moreover, according to the EU Energy Efficiency
Directive, EPCs are being put up for review with the aim of
achieving greater accuracy and consistency across Europe.
The limited availability of data and sensitivity of calculations to
emissions factors, as well as the heavy dependence on external
levers and the ever-changing regulatory landscape, pose a
challenge when making alignment objectives for these portfolios.
Moreover, we need sound public policy (especially for the
residential portfolio) to support vulnerable groups and guarantee a
just transition.
Santander España works to help customers align their residential
and commercial assets while calling for public policy that supports
this transition.
Santander promotes the energy efficiency of homes under our
residential portfolio through:
• A 10 bp interest rate discount for the most efficient homes.
• Special Banking Environment Initiative (BEI) and European
Investment Fund (EIF) lines of credit with additional discount for
homes with the best energy efficiency.
• Consumer loans with special terms and conditions for energy-
related renovation, including the installation of solar panels,
heating and cooling systems, insulation and other items.
• State-backed loans for owners associations to renovate entire
buildings.
• An energy efficiency simulator for customers and non-customers
to estimate the work required to renovate their home, including
projected heating bill savings and emissions avoided.
For our CRE portfolio, which is less granular, we perform these
actions individually with customers:
• Agreement with CBRE to advise institutional and commercial
customers on aligning and enhancing the energy efficiency of
their buildings.
• In 2024, Santander España has joined the commercialization of
the ICO MRR Verde line, with the aim of supporting the green
transition with special terms and conditions and making
buildings more energy efficient through renovation.
• In 2024, we created a new Business Growth team that
specializes in CRE. This enables us to control new origination
better and spot opportunities for energy renovation and green
finance.
Commercial real estate and mortgages in UK
Santander UK adopts the Partnership for Carbon Accounting
Financials (PCAF) framework to calculate financed emissions
associated with the Mortgages portfolio. Financed emissions are
calculated at property level using the value at origination, the
outstanding loan amount as of 31 December 2023, and building
emissions taken from EPC assessment and the PCAF emissions
factors for the property. Where no EPC exists, in mortgages we
used a postcode to infer the EPC or, where this wasn’t possible, a
regression model trained with multiple known property
characteristics. In commercial real estate we used proxy
information from the PCAF database. This resu lted in a PCAF score
of 3.2 for mortgages and 4.0 for commercial real estate, with a
portfolio coverage of over EUR 201.96 billion for mortgages and
EUR 11.04 billion for commercial real estate. Emissions intensity
for mortgages as of 31 December 2023 was 20.87 kgCO2e/m² and
25.40 kgCO2e/m² for commercial real estate.
The evolution of the financed emissions associated with our
mortgages portfolio in 2023 compared to last year is mainly
explained by an update of the internal methodology we use for real
estate financed emissions. In line with market practice, we base
our calculations on the Carbon Risk Real Estate Monitor (CRREM)
emission factors, resulting in lower attributed financed emissions.
Our initial assessment of Commercial Real estate highlights the
challenge of having sufficient coverage of asset level EPC data. We
were heavily reliant on use of proxy data which is reflected in the
overall PCAF score. We will continue to focus on improving data
quality for this portfolio and will streamline the process.
We also refreshed levers analysis to understand how the change in
UK government might impact on the alignment of our mortgage
lending and alignment pathways. Key levers identified within this
analysis include the implementation of the Future Homes S tandard
for new buildings and minimum energy efficiency standards for
buy to let properties. Wider grid alignment also materially
supports our alignment.
During 2024 we also conducted research into the barriers facing
consumers and have launched several pilot propositions intended
to build our understanding of the role Santander UK can play in
supporting our customers. This analysis continues to be used to
inform our ongoing green finance strategy and public policy
engagement over the coming years. Converging towards net zero
pathways by 2030 will be challenging to achieve, particularly given
the dependency on external factors such as policy and demand.
Considering this analysis (and while we will continue to advocate
for policy change) we have made further progress in supporting
our customers to reduce their emissions. We do not focus solely on
increasing our exposure to new build lending and have a range of
test and learn proposition products that support homeowners with
a range of EPC rating in improving energy efficiency. These
propositions also build our knowledge and capability.
The test and learn propositions launched in 2024 are:
• Octopus Energy – a solar panel installation partnership for
existing customers offering 500 pounds discount.
• Vibrant – an enhanced EPC and home energy efficiency advice
partnership available to existing customers.
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• Home Energy Cashback to incentivize customers to make green
home improvements.
• Bidirectional partnership with Scottish Power including an
unsecured product that would be available in Scottish Power’s
customer journey.
• Green mortgage offering for customers with an A or B rated
property who are remortgaging to benefit from a discounted
rate.
• Working with Core Logic under the UK Governments Green
Homes Finance Accelerator programme to provide the first
national retrofit coordination advisory service in the UK.
2.4.3 Measuring and assessing other portfolios
We are expanding the scope of the portfolios measured to
understand and assess the alignment dynamics of each one of
these portfolios maintaining our focus on our sectorial climate
approach. Although we are facing a clear lack of available data to
measure financed emissions, especially in “Retail and Commercial”
segments and in some regions. Some of the information needed to
properly assess the level of emissions and potential alignment of
our customers, is not being measured or available for our
customers (examples: energy performance certificates of real
estate assets in LATAM (Latin American) countries, emissions
calculated and reported by Corporates and particularly by SMEs,
etc…). We remain engaged to reduce these data gaps to measure
financed emissions in a way that can be useful towards steering
the alignment of other climate relevant portfolios and be able to
try to implement alignment levers to broad scope of our financed
portfolios.
2.4.4 Santander Asset Management’s (SAM)
alignment strategy and approach
In March 2021, we joined the Net Zero Asset Managers (NZAM)
initiative with the ambition to align the Santander Asset
Management portfolio by 2050 to help limit global warming to
1.5°C.
As part of joining this initiative, SAM set a target to halve net
emissions for 50% of its AuM in scope (some 27% of the total) by
2030, as well as certain engagement objectives. SAM maintains its
ambition to continue aligning its activity, promote greater
transparency, and strengthen cooperation between investors and
issuers in the net-zero transition. We conduct internal reviews on
the way we measure and disclose our progress, in parallel with the
NZAM review. We plan to take a more qualitative approach to our
reporting next year.
To analyse each issuer’s net zero efforts and progress, we
classified assets according to the Net Zero Investment Framework
(NZIF).
This maturity scale on the degree of issuers’ alignment with net
zero emissions targets provides us with a framework to check the
progress that issuers are making in their transition and identify
areas that require further effort in terms of engagement. It
considers these factors:
1. A long-term ambition consistent with the goal of achieving net-
zero by 2050.
2. Short- and medium-term targets to reduce GHG emissions.
3. Disclosure of scope 1, 2 and 3 emissions.
4. Emissions performance against targets.
5. Alignment strategy.
In 2024, we worked on developing our Net Zero engagement
strategy, which aims to use dialogue and voting policies to
encourage issuers to commit to alignment plans and transparency
and disclose accurate and credible information to be able to
monitor performance. It also motivates issuers to set ambitious
targets that are consistent with the Paris Agreement goals.
SAM is part of the Climate Action 100+ collaborative engagement
initiative and conducts regular analysis of Net Zero projects to look
into their possible adherence to it. In 2023, SAM joined the IIGCC
(Institutional Investors Group on Climate Change) Net Zero
Engagement Initiative (launched in January of the same year),
which aims to boost the number of entities that form part of the
CA100+.
2.4.5 Our environmental footprint
In this section we cover how Santander manages the following
IRO:

| I+ | Contribution to reducing the Group’s scope 1 and 2 greenhouse gas emissions. |

As part of our climate ambition, our strategy to lessen the
environmental impact of our operations involves: reducing our
CO 2 e emissions and compensating those we're unable to reduce by
mitigating beyond our value chain; reducing and handling waste
responsibly; and raising employees’ and other stakeholders’
awareness of environmental issues.
We disclose our findings from the exercise we conduct on the
scope 1, 2 and 3 emissions of our own operations at buildings and
offices. We also disclose scope 3 - category 3.15
'Investments’ (financed emissions) in the ‘SN 4. Our transition plan’
sustainability note.
We’ve been measuring our environmental footprint since 2001.
Since 2011, our energy efficiency and sustainability initiatives have
helped us cut our scope 1 and 2 emissions by c.86%. Though such
reductions achieved, we continue to find opportunities and new
technologies to become more energy efficient. In this sense, in
2024 we revised our efficiency target with the ambition of
achieving a reduction in emissions from our own operations of 75%
compared to 2020. The additional reductions proposed by this
review are 6% in scope 1 and 49% in scope 2 compared to 2024.
20 Leadership in Energy and Environmental Design
21 Building Research Establishment Environmental Assessment Method
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2024 environmental footprint

| 96% renewable electricity in 10 core countries where we are present |  |  |  | 1,012,554 MWh energy consumption |
| Scope 1 35,503 t CO 2 e direct emissions |  |  |  | Scope 2 24,350 t CO 2 e indirect emissions from electricity and other (market based) |

| For more details on our environmental footprint see note SN 7.1 'Green transition'.

The key drivers behind our reduction of consumption and
emissions (which we generally group into three-year plans) were:
• Efficient spaces: Better use of space in terms of daily building
occupancy and a more efficient and better located properties to
carry out our operations.
• Efficient maintenance and operational management of branches
and offices — implementation of ISO (International Standards
Organization) 14001/ISO 50001 and LEED 20 O&M standards as
drivers for continuous improvement from an environmental
perspective and to facilitate that we comply with growing sector
regulation at our premises in every market where the Group
operates.
• Awareness and involvement of the entire organization in
environment-related results.
• Technology: Heating, air conditioning, lighting, automated
control, new and more efficient systems at more affordable
prices.
• Vehicles in the Santander fleet fitted with better technology and
a wider range of vehicle types in every market.
• Improvements in environmental data collection to analyse
trends.
• The purchase of renewable energy and obtaining of energy
certificates.
The latest plan, Plan 2022/2025, which ended in 2024 with an
investment of EUR 38.3 million, achieved a reduction of more than
69.3 GWh through efficiency measures. Additionally, we converted
213.8 GWh into renewables through contract agreements. Other
outcomes of this Plan are:
• Over 8,800 kW (kilowatt) of solar panels for self-consumption
with a self-production of 18.5 GWh in Brazil, Chile and Spain,
which houses two of Europe’s largest solar installations on office
buildings and data centres, enabling us to reduce our scope 2
emissions.
• 37% of our workforce work at premises with a buildings or
energy efficiency certification or standard (LEED, Breeam 21, ISO).
These certifications reflect our efforts to reduce fuel, electricity,
paper and water consumption, as well as scope 1, 2 and 3
emissions. Examples include the recently confirmed Breeam
Excellent certification of our new UK HQ (Headquarters), Unity
Place, in Milton Keynes (almost 80,000 m 2), and of the Hernán
Cortés building in Spain.
• 96% certified renewable electricity either certified purchased or
self-produced in our 10 core markets, helps reduce our scope 2
emissions.
• 2,103 electric vehicle parking spaces at our buildings and
commercial offices across our footprint. This is well above the
1,250 target we included in the 2025 plan. Even with the
objective to electric vehicles, Santander continues to follow a
policy of using company shuttles, encouraging the use of public
transport, and implementing car sharing initiatives as part of a
more efficient employee commuting model.
Our 2030 Efficiency Plan for the Group builds on our progress and
will focus on the following initiatives and levers:
i. Renewable energy and self-production measures:
• Solar panels in Santander’s own buildings, data centres and
commercial premises.
• Geothermal energy.
• Bundled and unbundled agreements to purchase renewable
energy (suppliers, PPAs-Power Purchase Agreements, RECs-
Renewable Energy Certificates).
ii. Energy efficiency and consumption reduction measures
• Lighting efficiency projects.
• Temperature control efficiency projects.
• Automated measurement and control of office spaces and the
branch network.
• Projects to enhance façade materials.
• Projects to renovate and upgrade commercial premises.
• Project to modernize facilities.
• Communications and internal training to raise awareness among
employees of responsible water, electricity and paper
consumption and the correct ways to recycle.
• Continuous improvement programmes that follow ISO 140001 in
buildings and ISO 50001 in offices and branches in our markets
to reinforce the importance of robust property and maintenance
management.
• Projects to build new, more efficient headquarters and rearrange
our assets.
iii. Direct emissions reduction measures:
• Replacing fossil fuels with other forms of energy.
• Preventing the leakage of direct emissions from the temperature
control systems at all Santander premises.
• Updating and modernizing air conditioning systems with more
eco-friendly and efficient cooling mechanisms.
• Monitoring possible leakages in air conditioning systems and
implementing predictive and preventative maintenance.
• Updating Santander’s fleet with hybrid and electric vehicles.
22 Since emissions offsetting is done by country, the upward rounding of tCO 2 e means that the total amount of credits is slightly higher than the total sum of emissions.
23 We calculated these categories based on our operating expenditure in 2024. The emissions factors we used to calculate these categories in 2024 are based on the emission
intensities within the input-output (IO) database of the US Environmental Protection Agency (EPA), which are split by economic sector.
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• Replacing conventional oil or gas boilers with electric heat pump
systems and technologies where the weather allows.
With these measures, we want to continue reducing our direct
scope 1 and indirect scope 2 emissions, with specific targets that
will enable us to reduce:

Alignment lever | Scope 1 (tCO 2 e) | Scope 2 location- based (tCO 2 e) | Scope 2 market- based (tCO 2 e)
i. Renewable energy and self-production measures |  | 2,000 | 9,000
ii. Energy efficiency and consumption reduction measures | 1,600 | 20,000 | 3,000
iii. Direct emissions reduction measure | 600 |  |
Total | 2,200 | 22,000 | 12,000

Banco Santander remains offsetting scope 1 and 2 emissions. As
part of our voluntary carbon credit market monitoring, every year
we carefully analyse and select a list of initiatives, usually in our
core markets. We follow a strict carbon credit selection process
that includes due diligence and compliance of our environmental
policies. Projects are also certified under some of the industry's
most well-known standards. Moreover, all the carbon credits we
purchased in 2024 were ratified by an independent rating agency
to validate their integrity. In 2024, we used 59,858 credits 22 (85%
reduction credits and 15% removal credits), to offset our scope 1
and 2 emissions.
Other key measures
Waste management
Since 2021, our offices and buildings in our core markets have been
free of single-use plastics to meet the target we set in 2019. The
Santander Group City and Santander España’s central services
buildings have ‘Zero waste’ certification.
Employee awareness
Santander runs local and global employee awareness campaigns
on the importance of reducing consumption and waste. Each
subsidiary posts news and feature articles on the environment and
the Group’s ESG initiatives on its internal portal. In 2024, we
observed Earth Hour for the 15th consecutive year by switching off
the lights at the Group’s most emblematic buildings.
Scope 3
The assessment we conducted to determine the materiality of
indirect GHG emissions (scope 3) found that the only material
category under this scope was category 3.15 (financed emissions),
with a weighting of 99% of the total.
Moreover, the categories listed below are considered material
based on their volume, management capacity and, therefore,
potential to reduce them.
In addition to the scope 3 categories we reported on in recent years
(3.6 Business travel and 3.7 Employee commuting), in this
document we’re reporting on four more supply chain-related
categories 23 for the first time:
• 3.1 Purchased goods and services
• 3.2 Capital goods
• 3.4 Upstream transportation and distribution
• 3.9 Downstream transportation and distribution
To enhance the quality of these emissions and to draw up actions
to reduce them, Santander and Aquanima will work with the key
vendors of the leading purchasing groups to obtain information on
their carbon footprint.
2.5 Further actions and enablers
2.5.1 Strategy for engagement with other key
stakeholders
As mentioned previously, we believe that the banks are enablers of
the transition and as such, should not be considered as the sole
drivers of this process.
In order for banks to support the transition of their clients, the
enabling conditions must be in place. Our aim is to contribute
constructively to the transition debate by supporting policymakers
and regulators take a common approach to legislation. In this
sense, it is now necessary that the predominant regulatory and
“finance-centric” approach to the net zero transition that has been
adopted to date is reconsidered, acknowledging that the financial
sector is an enabler, but that it cannot be the sole driver of sectors´
investments towards a low carbon transition.
In addition, it is important that banks´ aim to supporting high-
emitting companies in achieving their transition to cleaner
production models is recognised as a priority. This means that our
financed emissions are likely to rise as we finance the transition of
these companies. Nonetheless, supervisors should not consider our
portfolios as misaligned with a 2050 net-zero pathway, but rather
the opposite; we are financing and engaging in our customers’
transition, not divesting from them.
There is a meaningful opportunity ahead to foster that the
appropriate levers are set to facilitate the transition of the global
economy. This includes the review of the current sustainable
finance framework. Whereas much progress has been achieved to
date in areas such as reporting on sustainability matters,
taxonomies to classify green activities and financing, the aim of the
European Commission to streamline and consolidate multiple
requirements on companies is very much welcome. The reduction
of complexity and of the regulatory burden would facilitate the
implementation of the framework by the market, and the
allocation of resources to support the transition, while positively
contributing to companies' competitiveness and economic growth.
Finally, a framework that supports business transition should not
seek to increase the capital requirements linked to ESG risk drivers
since the Pillar I prudential framework already considers their
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impact. Increased capital requirements would be counter-
productive and could jeopardize the transition of the economy —
especially in emerging countries and that of companies in carbon
intensive sectors.
Authorities should work together as much as possible on drawing
up the regulatory framework that provides the right tools to
finance the transition of the economy globally.

| For more details on our strategy for engagement with authorities, supervisors, NGOs, etc. see 1.2 'Stakeholder engagement'.

Partnerships and sector working groups
Partnerships with others in business and governments can help us
share best practice and accelerate progress if we are to tackle
climate change and protect biodiversity. Grupo Santander
participates in different organizations, alliances and working
groups: we engage with international and local stakeholders
(sector associations, think tanks, universities, peers and others) to
progress in global and company goals, in line with the SDG 17
(Sustainable Development Goal) on Partnerships for Goals.
In addition to the initiatives outlined in section 1.2 'Stakeholder
Engagement', we also engage with leading organisations to
improve banks’ stewardship of climate change and nature.
→ World Economic Forum - International Business Council:
Santander is participating in the "Transforming Energy Demand"
project, which aims to identify ways in which companies can
reduce energy demand intensity as a means of contributing to
the global energy transition, as well as to the bottom-line. The
IBC (International Business Council), currently chaired by the
executive chair brings together 130 CEOs and company chairs
across industries, from developed and emerging markets, on all
continents. Member of this group are responsible for c.3% of
global energy consumption.
→ World Economic Forum - Alliance of CEO Climate Leaders:
Santander continues its engagement within the World Economic
Forum Alliance of CEO Climate Leaders as key network to
influence stakeholders, including policymakers, and drive
change towards meeting net zero targets. We are also following
the work at the “Financing the Transition to a Net-Zero Future”
initiative.
→ Banking Environment Initiative (BEI): Coordinated by the
Cambridge Institute for Sustainability Leadership (CISL), we
continue to take part in the Bank 2030 initiative, which aims to
create a roadmap for the banking sector to support broader
society’s transition to a low-carbon economy.
→ Net Zero Banking Alliance (NZBA): We're a founding member of
this initiative (created in 2021) and member of the Net Zero
Asset Managers Initiative (NZAM), since 2021.
→ Financing the Just Transition Alliance: Led by the Grantham
Research Institute within the London School of Economics, the
goal of the Alliance is to stimulate and support system level
innovation that enables investors and the financial sector more
broadly to deliver a just transition in the UK.
→ Partnership for Carbon Accounting Financials (PCAF): We have
been a member of PCAF since 2021 and thus committed to
disclose our financed emissions according to the PCAF standard.
We also take part in its regional and sectoral working groups.
→ TNFD Forum: We are part of the TNFD Forum to contribute to
the framework for financial institutions that will help the sector
to assess, manage and report on impacts and dependencies on
nature. We also participated in different TNFD-pilots in LATAM
(Latin American) that allow us to gain important insights that
highlighted the significant challenge, particularly regarding the
lack of availability of primary data and tropicalized databases to
assess impacts and dependencies.
→ Energy Efficiency Financing Coalition: Led by the European
Commission and with the participation of Member States and
financial institutions, including Santander, the coalition seeks to
promote measures (non-regulatory and non-binding) that
promote energy efficiency in relevant sectors, such as cars,
agriculture, buildings, among others.
2.5.2 Governance & policies
Roles, responsibilities, and remuneration
Climate change and green transition oversight
The management and oversight bodies described in sustainability
note 2 approved our transition plan, as part of this report. Also, the
responsible banking, sustainability an d cultural committee (RBSCC)
reviewed our portfolio alignment targets, which the board of
directors then approved. These bodies also receive regular updates
on progress with our targets and our climate agenda.
Moreover, they have also overseen the climate finance reports that
we have been publishing in recent years.
Other bodies such as the audit committee, the financial accounting
and reporting committee, the management committee and the
sustainability committee take part in overseeing sustainability
disclosures. The risk control committee and the risks supervision
commission review risk appetite proposals before their approval.

| For more details on our ESG governance model, see note SN 2. 'Sustainability governance'.

Climate in incentive schemes
Since 2020, the Group’s variable pay scheme and, since 2022, our
long-term incentives, have considered green finance and the
progress made with climate and other sustainability targets.
In 2024, shareholders at the Annual General Meeting (AGM)
passed a board resolution on sustainability metrics for executives’
2024-2026 long-term incentives (with a weighting of 20%), which
are consistent with our targets. Half of the sustainability
dashboard covers supporting the transition to a low-carbon
economy, including socially responsible investment and green
finance raised and facilitated. Moreover, this line of action
considers the requirement to develop a transition plan that enables
a score of over 100%. Achieving a credible and comprehensive plan
will depend on the regulatory and political landscape.

| For more details on the integration of climate-related performance in incentive schemes, see section 1.4 'Sustainability governance'.

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Main areas involved in implementing our climate change
strategy
In 2024 we continued to embed climate management in business-
as-usual across CIB, Risk and Sustainability. For instance, CIB
strengthened its corresponding governance. And Wealth continued
to reinforce and update the working groups and policies that
oversee and coordinate its SRI strategy, described in section 3.2.2
'Responsible investment and social finance'. Consumer has
different working groups that meet monthly to address
sustainability projects and issues, and quarterly to review progress
in the sustainability agenda.
Beyond global businesses, a number of local units are engaged in a
process coordinated by Group Responsible Banking. The objective
is to progress the alignment agenda, promote knowledge and
expertise sharing by local teams and seek synergy in the design of
reliable transition plans.
Other corporate-level initiatives and groups that support
governance meet regularly to implement our climate change
agenda and inform on regulation updates. For example, our public
policy sustainability working group updates on upcoming climate
and sustainability regulation; a regulatory radar governance
working group that meets quarterly to monitor the status of
implementation of sustainability regulations and to assign
responsibility for the implementation of regulatory initiatives to
the Group's areas; an environmental footprint working group that
measures our footprint and reviews ways to reduce it; and a
sustainable bonds working group that oversees sustainable bonds
issued from Group and its subsidiaries.
ESG Reporting & Internal Control
A new ESG Reporting & Internal Control team, set up in the second
quarter of 2023, in the Financial Accounting & Management
Control division oversees the disclosure, supervision and control of
the ESG information the Group uses to meet regulatory
requirements and stakeholder expectations. This year, the team
worked with each area in question to make information gathering
and the governance and control of disclosed information more
automated and efficient. The emission reduction objectives of our
own operations emissions (scopes 1 & 2) have been reviewed in
the Group’s ESG Reporting Forum.
ESG classification meetings
As part of our green transaction assessments, we created global,
regional and local panels to provide additional scrutiny and
validation, and coordination across the Group; agree on labelling
transactions as green, social or sustainable; and make sure that we
use the same standards and procedures across our footprint. The
Risk function leads these panels, which business, compliance and
sustainability teams also take part in.
Internal Audit
The internal audit function reviews climate risk, for more details
see note SN 2. 'Sustainability governance'.
Policies and guidance
The Group has different frameworks and policies that establish the
principles, processes and responsibilities for managing ESG criteria
throughout Santander Group.
The Group establishes ESG policies, procedures and guidelines
adapted to local regulations and applied to all units. We
systematically review the scope of the policies to adopt ESG
standards in accordance with international best practices. The main
ones are the ESCC risk policy and the Responsible banking and
sustainability policy.

| For more details on our ESG governance model see note SN 2. Sustainability governance '.

| For more details on our ESCC risk management policy, see section 3.2.3 'Environmental, social and climate change risk management'.

Climate training and skills development
Particularly in climate, we have developed different initiatives to
enhance capabilities, beyond the training on sustainability detailed
in section 3.3.1 'Talent and skills development'. Some themes of
these initiatives are social and environmental risk management
and sustainable finance.

| For more details on our employees training and skills development see section 3.1.1 'Talent and skills development'.

24 For more information on employee dialogue, see section 1.2 of Dialogue with our stakeholders.
25 The following are not included as Employees: a) Interns; b) Salaried employees on leave or career breaks whose employment contracts are suspended under the respective
local employment regulations; c) Non-salaried individuals with temporary employment contracts through an external provider (NACE78) performing similar tasks to in-house
staff, who do not receive salaries or benefits paid by Santander, nor self-employed workers; d) Other workers engaged in different tasks within the value chain under service
contracts. Additional information on the characteristics and distribution of our employees is provided in the 'Sustainability Notes'.
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3. SUPPORTING EMPLOYEES,
COMMUNITIES AND CUSTOMERS
(Social information)
3.1 Our employees
Aiming to attract and retain a talented team, our approach is based on 24:
→ promoting an attractive employee value proposition that offers real opportunities to grow and harness potential; innovative ways of
working; projects that inspire; and a shared, uplifting culture.
→ offering optimal conditions that safeguard employee health and well-being, with fair and competitive remuneration and initiatives that
afford a better work-life balance.
→ promoting an inclusive and meritocratic culture where everyone feels valued.
3.1.1 Talent and skills development
This section outlines how we manage the following IRO:

| I+ | Promote continuous career development and personal growth through learning and development programmes. |

For the purpose of this Annual Report and in line with previous
years, Santander defines employees as people who have an
employment contract with any of the companies that comprise our
consolidated group and whose contract remains in force at the
time of publication. 25

206,753 employees |  | Europe 42.2%
| North America 20.0%
| South America 37.8%

It is fundamental that our employees have the necessary abilities
and knowledge to perform their role.
i. Attracting talent
Our talent attraction strategy focuses on positioning ourselves as
an employer of choice. In 2024, we welcomed 33,175 new
employees to the Group.
We focused on:
a. digital transformation.
b. graduate internship programmes.
c. bolstering our employee value proposition (EVP).
We offer programmes and experiences for our employees’
personal and career development:
• Development programmes adapted to different levels and
businesses within the organization.
• Temporary and permanent domestic and international mobility
and functional experiences.
• Training based on lifelong learning.
ii. Talent management
We reaffirmed our commitment to developing talent in 2024. We
kept close watch on our units’ and businesses’ needs to anticipate
and cover their requirements, with a proactive approach through
initiatives that foster individual growth and boost the wealth of
talent in our teams.
Developing potential
Our potential review model, implemented in 2022, has enabled us
to delve deep into the skills, expertise and aspirations of some
26 YourVoice response to the question: “My job enables me to learn new skills and develop them”. In the top 5% of the finance sector.
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124,112 employees . It has driven us to draw up personalized
development plans based on each person’s needs.
We came up with a leadership profile and a common leadership
assessment methodology to foster transformational and
collaborative leadership aligned with our strategy and gain deep,
objective and comparable knowledge of our leaders. This also
enables us to support their development and make key decisions
for the Group.
Mobility matters
We have our global international mobility policy approved by the
Human Resources Committee by decision from the Group Board, is
an essential tool for the development of our professionals. The
objectives of this policy are to: contribute to the development of
talent in the Group; strengthen succession plans; attract external
talent; encourage global mentality; facilitate international
movement to satisfy business needs; share in a transparent
manner the criteria for mobility across the workforce.
iii. Learning and development
Our learning and development policy, provides an action
framework for the design, supervision and deployment of learning
activities with the purpose of promoting innovation and the
development of skills in our employees.
In 2024, we allocated EUR 64 million to employee training to
provide employees with the resources and tools they need to
enhance their skills and employability and to meet critical business
and market demands.
173,309 employees accessed Dojo, our digital learning platform
and we continue to roll it out to reach all employees. On top of its
vast catalogue of 174,223 references with courses in critical
competencies promote that our employees are up-to-date with the
latest trends and technologies. Dojo offers customized
recommendations based on current and future roles to foster a
culture of personal development and lifelong learning.
Global learning community for leaders
The aim of Elevate is to equip our senior directors with the means
to lead their teams and achieve their strategic objectives.
It’s fully digital format enables directors to sign up to development
programmes that are organized into Learning Paths (People, Tech,
Strategy and Change) that address the critical skills needed to lead
the Group’s transformation.
It provides access to the latest trends, content and tools, and helps
create networks of senior leaders to promote the sharing of best
practices and experiences. It also encourages them to use what
they learn and make a clear path to drive our transformation.
Talent development programmes and promoting a
culture of lifelong learning
Our learning and talent development strategy places focus on the
development of young talent and digital business profiles, with
programmes such as Young Leaders and BeTech & Business.
These programmes are designed to identify and develop internal
talent, offering growth opportunities in the career of our
employees, helping them be prepared for future challenges.
We trained our employees in the skills they need to further their
careers. In 2024, 103,154 employees received training in core
business skills related to technology, banking and people to
enhance individual performance.
We award certificates to employees who complete training
activities and programmes to recognize their new skills. These
certificates are approved by an independent issuer. In 2024 17,305
employees obtained certificates, which will enable them to
broaden their career horizon, apply for new opportunities and
accredit their knowledge.
Mandatory training and promotion of Sustainability
and Responsible Banking
To reinforce the Group's culture and knowledge in relevant
matters, we have mandatory training, which looks to train all
employees in strategic and/or regulatory topics approved by the
Global Compliance Management Committee. In 2024, we covered
13 topics in mandatory training, including sustainability, code of
conduct, harassment prevention, cybersecurity, financial crime and
data protection. This efforts aims to protect the organization and
increase our employees capabilities to act with responsibility and
ethics in their daily activities. Moreover, each subsidiary has
mandatory courses related and applicable to their local laws and
regulations.
This year, our employees have participated in a training itinerary on
Green Finance for Retail & Commercial Banking, with transversal
and country-specific modules in countries we are present with a
sustainable offer. Furthermore, all employees have received
mandatory training on practical integration of ESG criteria into
commercial processes. As part of the Board of administration
training program, a session on sustainability with focus on ESRS
was conducted. This training strengthens the knowledge and skills
of our employees, drives business and benefits the community.
We continue progressing on the certification of experts in
sustainable finance topics and promoting our ESG Talks, a program
of sessions where we share knowledge and points of view on ESG
topics, with the participation of internal experts from different
businesses and functions involved in our sustainability agenda. We
have also trained our employees in inclusion, environment, health
and safety, as well as expanded our learning library related to
sustainability topics.
We will continue to invest in developing our employees so that
they are equipped to face future challenges and contribute to the
ongoing succ ess of the Group.
8.7 (out of 10)
Rating on the learning,
usefulness and development of skills. 26
27 For more details on absenteeism and health, see the 'Sustainability notes'.
28 Average employee rating of the statement 'Employee health and well-being is a priority at Santander'. I n the top 25% of the financial sector. .
29 Average employee rating of the statement 'Santander offers me the support I need in terms of physical and mental well-being to perform my job', in line with the financial
sector.
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3.1.2 Working conditions
This section outlines how we manage these IROs:

| I+ | Promote the health, well-being and security of our employees in a safe and inclusive workplace; facilitate a positive work-life balance through flexible working. |
| I- | Harm employees through discriminatory conduct, inadequate working conditions, harassment or corruption. |
| I+ | Promote the general well-being of employees and provide appropriate remuneration under equal conditions based on merit and market rates. |
| R | Potential risk of conflict with employees based on the infringement of their rights. |

i. Employee health and well-being
Our employees’ health is embedded in our culture and corporate
strategy, under which our people and senior managers work
together to protect and promote each other’s health, safety and
well-being.
Based on our strategy, we implemented:
• safety and prevention systems;
• proactive initiatives to boost the overall well-being of
employees;
• a safe and supportive working environment when it comes to
health; and
• flexible work alternatives to enhance work-life balance.
Our General health, safety and well-being policy aims to promote
healthy lifestyles and create long-term value for employees and
society. It applies to all our subsidiaries and follows local laws in
the markets where we operate to the letter.
Occupational health 27
The sector-level collective agreements that we sign up to consider
employee health and occupational risk prevention.
We offer regular check-ups and tests after extended absences in
every market where we operate. We also cooperate with local
public health authorities, employees’ legal representatives and
occupational risk insurers. In every subsidiary with over 500
employees (accounting for 99% of the Group), our people are
covered under occupational health and safety systems and policies
in compliance with local risk prevention standards and best
practices.
We revised our occupational risk prevention plans with employees'
councils through:
• regular assessments of risk factors and preventative measures to
handle or mitigate them;
• prevention through design in new work spaces and tools;
• procedures regarding safe and quality working conditions and
certifications;
• emergency and evacuation plans to protect employees,
customers, suppliers and visitors to our premises; emergency
response; first aid training;
• measures to detect and minimize risk due to postural hygiene;
• accident investigation to avoid reoccurrence; and
• active participation of employee accident prevention delegates on
health and safety committees.
Well-being
We aim to raise awareness about health and well-being through
our global BeHealthy programme, which celebrated its eighth year
in 2024.
In 2024, we ran several initiatives, activities and events in all our
subsidiaries following the programme’s four pillars: know your
numbers (self-awareness), eat well (healthy nutrition), move
(physical health) and be balanced (mental & emotional well-
being). In 2024, over 64,000 employees took part in local
BeHealthy initiatives.
Rating on satisfaction and opinion on health

8.4 (out of 10) Health and well-being as a priority 28 |  | 8.4 (out of 10) Support I need in terms of physical and mental well- being to perform my job. 29

In April, to celebrate World Health Day, we held BeHealthy Week,
bringing health and well-being to the focus of the Group
worldwide, with daily, in-person and virtual events. We also joined
global initiatives run by the World Health Organization, including
Global Mental Health Week, Women’s Health Month and Men’s
Health Month.
These initiatives gave our employees access to mental health and
emotional well-being support programmes, as well as to sports
centres, nutrition and mental health apps, specialist health and
preventative care, and other free or discounted services.
Work-life balance
Santander promotes employee work-life balance. Employees in all
our entities are entitled to paid paternity or adoption leave or to
care for newborn children or family members. In 2024, 8,195
30 10,874 employees (5.3% of Santander's total workforce) exercised their right to parental or family care leave in 2024. The rate by gender was 6.7% for women and 3.7% for
men.
31 The nine core markets with the most employees are Argentina, Brazil, Chile, Mexico, Poland, Portugal, Spain, the UK, and the US, accounting for 93% of our total.
32 Employees’ rating of the question on whether they are satisfied with the amount of flexibility they have in their work schedules (within the average range for the finance
sector). A. 2024 Your Voice survey.
33 At Santander Polska, this leave is shared, with a guaranteed minimum for both parents of up to 20 weeks, and in Santander Chile the father has 2 weeks of guaranteed paid
leave.
34 See our commitment to human rights (which is included as well in our Responsible Banking and Sustainability policy) and international mechanisms of application in section
1.4.2. 'Human rights due diligence'.
35 In 15 of the countries with the highest number of employees in the Group, there are union representatives according to local regulations (by company, location or individual
affiliation). In those countries, except for the United Kingdom where data on union membership cannot be disclosed, 60% of workers have union representation.
36 For more details on our provisions, see Note 25 of this report.
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employees took paternity, maternity or adoption leave and 2,824
other employees family care leaves. 30
We have enhanced our flexi-working policies and options for
employees in recent years to keep up with digital transformation
and social change. Almost all our employees in central services
roles can now adapt their working hours and location to fit with
their personal circumstances. In nine of our core markets, 31 almost
all our employees in central services roles take part in flexi-
working programmes that enable them to work remotely or adjust
their entry and exit times. We review these measures constantly
with our employees and in view of customer needs — considering
productivity, commitment and our experience as an employer.
Rating on satisfaction and opinion on flexibility
8.8 (out of 10)
Flexibility at Santander 32
Social protection
At Santander we offer our employees protection against a loss of
income due to sickness, accidents at work, acquired disability and
paternal leave.
Our employees have public or private protection for loss of income
due to sickness or acquired disability according to local regulation.
On top of public health services, we offer additional private cover in
our core markets, under which employees usually receive full pay
during periods of sickness.
Because employee care and respect for their rights are important to
Santander, 98% of our workforce have a permanent contract. In all
countries, employees have coverage against loss of income due to
unemployment per local laws.
Our employees have appropriate pay protection in the event of an
occupational accident. In Spain and other countries, we supplement
the financial benefit that can reach the entire salary of employees in
situations of temporary disability.
The Group has a minimum standard in each unit of fully paid
parental leave. All Group employees are entitled to a minimum 14
and up to 30 weeks’ fully paid primary parental or adoption leave,
while all parents (or secondary caregivers) have 4 weeks of fully
paid parental or adoption leave 33. Because of our inclusion and
flexible return measures, 76% of new mothers continue working for
Santander 12 months after returning from their birth, adoption, or
pregnancy leaves.
Our employees have retirement coverage through public or private
pension schemes in every market where we operate. Santander
supplements this with defined contribution pension plans for our
employees in our core markets.
Collective bargaining and social dialogue
Santander promotes respect for the rights of employees 34. In 2024,
we continued to guarantee freedom of association and the right to
collective bargaining. Our Responsible banking and sustainability
policy considers forming or joining unions and other representative
bodies a basic right of workers, in accordance with Article 10 of our
General code of conduct.
We also ensured respect for freedom of association, trade unions,
collective bargaining and protection for employees’
representatives under the laws of each country where we
operate 35.
At 2024 year end, 110,692 employees worked at premises or in
companies with union representation.
We continued to promote and comply with the International
Labour Organization’s Fundamental Conventions and have a
European Business Council that meets regularly — Group senior
managers and employees’ legal representatives in Italy, Poland,
Portugal, Spain, the UK and other European countries attend.
We also maintained a constant dialogue with employees’ legal
representatives in bilateral and special committee meetings in our
markets where all parties could discuss reporting, queries and
negotiations about working conditions, and employee benefits. In
core countries, important agreements have been reached during
2024, including committees on occupational health and safety,
monitoring of gender balance plans, control of pension plans,
training, updates to corresponding collective bargaining
agreements, and also other bilateral meetings with union
representatives.
In Brazil, Santander and other local banks, implement preventive
measures to minimize the risks from individual labour-related
claims, which are common in this market. We have sufficient
provisions to cover these risks 36. In order to minimize these claims,
an internal oversight committee has been established, setting
preventive measures to promote an environment with adequate
working hours and compensation for all positions in the same
location, in compliance with local labor legislation and
jurisprudence court rulings. Likewise, the departure records have
been digitized, and we have strengthened policies and guidance to
employees for the correct registration of working hours and
digitalization of departure records.
Protection of employee data
The handling of employee data is carried out under the protection
of labor laws and based on legal obligations or legitimate interests
covered by data protection regulations. As the data controller of
such data, Santander has the appropriate procedures, tools, and
controls based on the policies of the Group's data processing.
37 Other compensations that complement the salary of our employees: benefits, pensions, other fixed compensations, incentives, and short or long-term variable
compensations.
38 Climate goals account for 2% of the total remuneration of executive directors, while sustainability targets represent 8% of their total variable remuneration.
39 See Note 46 of the annual accounts.
40 Material risk-takers.
41 Measured with the EPG - equal pay gap ratio, which compares the average compensation between men and women who perform similar tasks. Results for 2024, across the
entire Group.
42 Average employee rating of the statement “I receive fair pay according to market rates (e.g. salary, promotions and benefits) for my contribution to Santander”, putting us in
the top 25% of the finance sector.
43 Average employee rating of the statement “the processes for determining compensation (e.g. salary, bonus and benefits) are fair and impartial”, in line with sector
benchmarks.
44 The employees who did not take part in MyContribution in 2024 were new hires and employees in some customer service, debt recovery and contact centre roles, who are
subject to similar performance management schemes but with shorter and more continuous cycles due to the nature of their work. 90,998 women (84% of the total number
of women at year end) and 86,071 men (87% of the total number of men employed). Due to statistical significance, we don't report other gender's percentages.
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| For more Information on data protection, see section 3.3.3 `Privacy, data protection & cybersecurity'.

ii. Remuneration and corporate benefits
Adequate remuneration
Our remuneration framework combines fixed and variable pay
schemes based on the performance of employees and the Group.
Our remuneration and performance policies, as well as our general
code of conduct, forbid differential treatment that is not based on a
review of performance and corporate behaviours. It also promotes
dignify pay.
Specifically, the remuneration policy lays the foundations for non-
discriminatory practices (related to performance and internal
consistency), as well as the principles, processes and criteria for
granting fixed and variable remuneration, creating long-term value
by managing risks.
Fixed remuneration schemes reflect local market conditions. To set
pay, we strictly abide by the practices, regulations and collective
agreements in force in each jurisdiction where we operate.
All Santander employees receive a salary equal to or higher than
the legally established minimum in each of our markets and we
comply with all local legislations and relevant collective
agreements. Almost all employees (99%) receive other forms of
remuneration that supplement their salary 37. This demonstrates
our pledge to provide fair, competitive remuneration and the
appropriate combination of fixed and variable pay.
All our businesses and subsidiaries have short-term variable
remuneration schemes to reflect what we have accomplished and
how, according to Group-wide quantitative and qualitative goals as
well as individual and team goals, behaviour, leadership,
sustainability, commitment, growth and risk management. These
schemes promote meritocracy, recognize individual and team
contributions, and promote employee growth and well-being.
Aligned with sustainability goals, the variable compensation of
executive directors also weighs compliance with our sustainability
and climate goals 38.
In 2024, we paid EUR 14.3 billion in employee wages and
benefits 39.
To comply with EU regulations on remuneration and manage risk
correctly, we identified 1.246 employees subject to a deferred
variable pay scheme because their decisions can have a material
impact 40 on Santander's results. Therefore, the majority of them
are subject to a policy of deferral of a significant portion of their
variable compensation (ranging from 40% to 60%, depending on
their level of responsibility) for a period of four to seven years. This
variable compensation is paid out 50% in shares and 50% in cash,
and is subject to a possible reduction (malus) or recovery
(clawback).

| For more information on adequate salaries, total remuneration ratio, see SN 7.3 'Employees'.

Equal pay
Our remuneration practices promote a non-discriminatory salary
management in terms of gender and equivalent remuneration,
especially in those cases where employees perform the same or
similar work (equally remunerated for equal work or work of equal
value).
Our salary comparison between women and men who perform
similar functions remains at c. 0, which confirms our positive
performance in recent years and meets the ambition we set for
2025 41. In certain jurisdictions we continue to periodically assess
compensation levels for pay equity and where appropriate make
adjustments to compensation.
We often consult our employees to gauge how appropriate and
acceptable our remuneration policies are and they recently
deemed our remuneration policies competitive.

| For more information about the employee consultation process, refer to section 3.1.4. 'Our listening strategy'.

Rating on satisfaction and opinion on compensation

7.8 (out of 10) Fair pay 42 |  | 7.6 (out of 10) Fair compensation process 43

MyContribution
MyContribution is our common performance management model.
We update it regularly, and it is aligned with our culture.
177,081 Santander employees had their performance reviewed
( 86% of the total 44) under this model in 2024.
These reviews include quarterly or annual quantitative variables;
corporate behaviour assessment variables (TEAMS) based on
feedback from peers and internal customers; and risk management
variables (RiskPro), which enable us to analyse individual and team
performance holistically.
45 Lesbian, gay, bisexual, transgender, intersex, and queer.
46 Average employee rating of the statement “At Santander we accept and respect everyone based on who they are, independent from gender, nationality, sexual orientation,
religion, etc.”, putting us in the top 10% of the finance sector.
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3.1.3 Inclusive culture
This section outlines how we manage these IROs:

| I+ | Promote a workforce that reflects the society we live in and encourages collaboration; guarantee the same opportunities for all our employees, irrespective of gender, disability or other characteristics. |

Inclusive culture is a component of our corporate culture policy,
through which we focus on building a merit-based culture of equal
opportunity and inclusion in compliance with laws.
In the global markets we serve, our focus on an inclusive culture is
a critical driver of our business success. Our talented and engaged
team generates customer loyalty, leading to strong financial
results for our shareholders. By fostering equal opportunities for
all and an inclusive environment that values different backgrounds,
experiences, and viewpoints we enhance our problem-solving
capabilities, improve decision-making, and boost creativity to
achieve this.
Our approach to hiring, training, promoting, and retaining our
workforce is based on meritocracy. Our success is intrinsically
linked to the effectiveness of our team, making it a cornerstone of
our strategy for sustained growth and profitability.
Related matters are discussed at the highest level— the Group
Board cannot delegate these discussions and our executive
committee reviews progress.
Our inclusive culture is embedded in the global procedures and
regulations that underpin our organization and promotes
meritocracy. For instance, it features in our key position,
succession, nomination, and selection, suitability assessment and
succession of directors policies. It is also embedded in our Group
leadership principles and performance and remuneration reviews.

| For further detail, see section 4.1 'Corporate culture'.

| For further detail, see section 6 'Remuneration' of the corporate governance chapter.

We have a strategy on this matter in place since 2020, which drives
us to act ethically and transparently. We base our global strategy
on five pillars (gender, persons with disabilities, LGBTIQ+ 45, ethnic
and culture, and generational) and take action in other areas such
as socio-economic. While we maintain a global outlook, each
subsidiary adapts to its local landscape.
Where local laws allow, we encourage our employees to disclose
personal information voluntarily so that we can identify areas for
improvement and make decisions based on true data.
Rating on satisfaction and opinion on inclusion
9.3 (out of 10)
Inclusion 46
While our local teams have action plans based on their own
characteristics and conditions to continue supporting progress on
inclusive culture, we also run global initiatives to continue making
inroads:
• We run mentoring and networking programmes with diverse
groups.
• Since 2022, we have held global awards to give recognition to
individual and team initiatives that help facilitate equal
opportunity access. Stand-out initiatives in 2024 included a
project in Poland for the accessibility and inclusion of persons
with disabilities; a scheme at the Corporate Centre to spark the
interest of the daughters of our employees in studying STEM
(Science, Technology, Engineering, Mathematics); and promoting
labour reinsertion of women in Spain.
• We are part of global initiatives, such as:
47 The percentage of male senior executive positions is 68,8%. For more data and metrics about employee characteristics, see the Sustainability Notes.
48 Retail & Commercial and its support areas account for 74.5% of our global workforce.
49 Applicable in accordance with local regulations.
50 Including these Group categories: Sr.Executive VP, Executive VP, VP, Director, Manager, Expert and Branch Manager which account for 14% of our employees.
51 At year end, 38.4% of senior management positions (Senior Executives and Other Executives) are held by women. This ratio does not include joint ventures due to their
temporary nature and joint management (they account for only 1.7% of our workforce).
52 When this programme or others were rolled out in a country where regulatory restrictions apply, the programmes are adjusted to comply with any required principles.
53 We have a growing proportion of employees performing STEM-related functions (Data and Services, Information Technology-IT Support, and Products), totalling 30,089
employees across the Group.
54 The gender pay gap measures differences in remuneration between all women and men, regardless of job type. For our management purposes, we use the gender pay gap
as the difference between the median remuneration of men and women, expressed as a percentage of men's remuneration.
55 Comparable to 2.2% at the end of 2023. As in previous years, we follow local regulations for the calculation and recognition of employees with disabilities. In most countries,
disabilities are recorded at the employee's request with the support of a certificate issued by social services (e.g., degree and date of disability). In the UK, disabilities are
recorded at the employee's request and do not require a certificate.
56 The law in 12 of Grupo Santander’s markets (accounting for 69% of our total workforce) allow for the voluntary request of gender identity information from employees.
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Gender
We promote career development based on merit and support our
high potential employees at every level to foster variety of
leadership 47.
40% of our board members are women, which meets our goal for
women to make up 40% to 60% of our directors. This goal will
become a legal obligation in some jurisdictions from 2026.
Over the past five years, we have increased the number of women
in or senior executive positions from 22.7% in 2019 to 31.2% in
2024 — reaching 34.4% in our core Retail & Commercial
business 48.
This indicator used as reference the senior executives with the
highest ranking in the organisation, representing 1% of the total
workforce. Therefore, we agreed to expand the base reference 49, a
move that is possible thanks to more quality data and greater
analytical capacity, with common management and development
programmes across the Group, which also responds to stakeholder
expectations. The new indicator will allow us to:
• Reach more of our workforce 50 and, therefore, reach a greater
wealth of talented women internally that will proceed towards
senior roles organically.
• With this approach, we expect to progress gradually and
sustainably towards gender balance, moving closer to c.40% in
2030 51.
Women make up 52.4% of our total workforce, a stable trend
given 52% of new hires have been women.
We run initiatives to promote equality in the job market . Our
programmes include:
• Women in Tech, which has been executed in 7 52 core countries of
the Group to attract talented women with a technology or digital
background (29% of our STEM roles are held by women) 53.
• InvestHer, is a global programme from Wealth Management &
Insurance with participants from different Group´s geographies,
that promotes the presence of women in global business roles.
• Our Santander Women Network, founded in 2018 to promote
development, empowerment and connection of women within
and out of the organization, has 8,000 professionals participating
and reaching representation in up to 16 countries. Some
initiatives are: Thursdays to Share, I Am Remarkable, Global
Mentoring Program, Women in Banking (WiB), the first women's
network in the Spanish banking sector, and the celebration of the
40th anniversary of the European Women's Management
Development Network at Banco Santander Financial City hosted
by SWN.
In 2024 we maintained our equal pay gap (EPG) at c. 0% after
reaching our goal in 2023 which we fulfilled two years early. In
certain jurisdictions we continue to periodically assess
compensation levels for pay equity and where appropriate make
adjustments to compensation.
We also measure at a global level the gender pay gap (GPG), which
compares the median pay of women and men. In 2024, our GPG
was 26% (improving 2.1 p.p. and 4.5 p.p. vs 2023 and 2022) 54.
Persons with disabilities
We strive for the successful inclusion of our 4,828 employees with
disabilities (over 2.3% of our global workforce 55). There is a legal
requirement regarding the inclusion of persons with disabilities in
the workforce at least in 7 of countries with more than 1,000
employees.
We have employee networks in several units that aim to include
persons with disabilities. Our global Enable network, formed in
2022, has over 2,700 members in 10 countries.
In 2024, to promote this network, we boosted awareness and
inclusion in the Group through events on visibility, technology,
accessibility, and women.
Our event to mark international day of persons with disabilities,
which we hold every year, included a talk with paralympic
medallist Susana Rodríguez Gacio. She shared her experience and
how education, hard work and passion have enabled her to break
down barriers and triumph in sport and medicine.
LGBTIQ+
Our global network of LGBTIQ+ employees and partners, Embrace,
ran events to share their challenges or topics of common interest.
In June, we marked LGBTIQ+ pride days with an event where
employees from across our footprint shared the challenges this
group continues to face in being seen and heard. Embrace
employees also featured on our “Santander te cuenta” podcast,
which we release internally and externally.
Currently, 2.8% of our workforce identify as trans, non-binary or
other diverse among the employees who voluntarily offered to
share this information 56.
Ethnic and culture
We monitor ethnic minority representation in four of our core
markets. Employees who identify themselves as part of an ethnic
57 Consider race and ethnicity, color, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national or social origin, among others."
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or racial minority in these markets account for over 31.6% of the
total workforce.
We have employee inclusion networks such as: Reach, Bold and
Talento não tem cor, which in 2023 had over 1,300 members.
Anti-harassment protocol and training
To reaffirm the Group’s ambition to combat discrimination 57,
108,213 employees across the Group received specialized training
in 2024, while 101,651 employees undertook a course on sexual
harassment. These courses are part of our global anti-harassment
protocol and General code of conduct as a common framework to
establish guaranteed standards and fight against discrimination
and behaviours that contravene fair treatment and moral integrity.
Moreover, our subsidiaries have action plans in place based on
their own characteristics and conditions to continue supporting
quality inclusive culture training.

| For further detail related to workforce, see SN 7.3 'Employees'.

| Please see our work and sexual harassment protocol and moral integrity at work at santander.com/es/nuestro-compromiso/nuestra-cultura/ diversidad-equidad-inclusion

3.1.4 Employee feedback and experience
As detailed in the “Engagement with stakeholders” section, “Your
Voice” is our regular listening strategy to gather employees’
feedback. It includes specific questions on our processes and we
analyse the comments made on material impact and our
employees’ concerns.
Employees can give feedback and leave comments on every
question, preserving anonymity at all times, since the provider
facilitates data in an aggregated form to the Group. In addition,
managers with five or more employees can access real-time
aggregated results of their teams to identify levers that drive
greater engagement and promote dialogue, trust, and
transparency. As a result, this information helps each leader to
enhance team performance and reduce burnout, resignations, and
absenteeism.
In a broader sense, cross-geographical and global business action
plans are also established. During this year, numerous actions have
been launched to improve the employee experience and value
proposition. Some of these initiatives have focused on professional
growth, recognition, and workload management. In addition,
efforts have been made to simplify internal processes and promote
organizational transformation and change.
Since the implementation of YourVoice in 2022, we have seen a
positive trend in results and participation, reaching levels that
position us above the financial sector, with a participation rate of
83%.

8.7 (out of 10) General engagement Within the top 25% and +0.4 compared to the financial sector. |  | The engagement measures the level of involvement and enthusiasm of employees towards their work and the organization.

See in the section 4.3 'Ethics Channels' the processes to repair
negative impacts and channels for own staff to express their
concerns.
58 Credit stock as at 31 December 2024.
59 Credit stock as at 31 December 2024. Data for SMEs and the self-employed covers individual customers with an outstanding loan at 2024 year end
60 Does not include SAM funds distributed by Private Banking to avoid double counting.
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3.2 Communities' sustainable development
We consider affected communities those where Santander has a presence as an entity, either through its businesses or its community support
activities, and includes any specific groups mentioned in this chapter.
3.2.1 Supporting the economic and social
development of our communities
In this section we cover how Santander manages the following
IRO:

| I+ | Drive economic growth and job creation in the regions where we operate and provide credit to people and businesses. |

i. We help people and businesses prosper
Through finance and investment
→ EUR 350.5 billion to help people buy homes and EUR 214.2
billion to purchase other goods. 58
→ EUR 330 billion to help set up or grow companies (including
more than 530 thousand SMEs and self-employed). 59
→ EUR 24.1 billion in green finance raised and facilitated and EUR
88.8 billion assets under management in Socially Responsible
Investment.
→ EUR 1.27 billion disbursed in microcredits to more than 1.3
million of microentrepreneurs to support the creation and
expansion of their businesses.
Through community support
→ 2.6 million new people financially included.
→ EUR 166 million invested in communities, including 104 million
to promote higher education, employability and entrepreneurship,
benefitting 5 million people.
3.2.2 Responsible investment and
social finance
In this section we cover how Santander manages the following
IRO:

| I+ | Contribution to sustainable development through financing and investment that promotes sustainable performance in companies, addresses societal challenges, mitigates a specific issue, or pursues positive societal outcomes. |

i. Social finance
Santander in its financing activity, support social activities such as
building hospitals, universities and homes intended for vulnerable
people. The tagging of these deals as social is being done to
improve the identification, management and reporting of this type
of financing, following the same operating model and system that
is used for environmental or sustainable finance.
Within this concept we consider the microfinance businesses that
the bank has in Latin America (Prospera in Brazil & Colombia, Tuiio
in Mexico and Surgir in Peru), through which the bank gave EUR
1.27 billion in microcredit in 2024. These businesses, covered in
more detail in the financial inclusion and financial health section of
this report, go in many cases beyond financing, providing access to
a bank account and other services such as microinsurance for
underbanked microentrepreneurs. During 2024, more than 1.3
million microentrepreneurs benefitted from this type of financing.
Additionally, during 2024 we have signed several agreements with
Multilateral Development Banks in Spain, Chile, Brazil and Poland
where these agreements include allocating part of the new
portfolio to social finance. An example is the agreement with the
IFC in Brazil to issue a social bond allocating funding to small and
medium enterprises in underserved regions of Brazil, as well as to
microentrepreneurs across the country.
ii. Socially responsible investment
We continue to improve our offer to clients with investment
options that promote ESG factors and/or have sustainable
objectives, with the aim of reaching EUR 100 billion of socially
responsible investment (SRI) assets under management (AuM) in
Wealth Management & Insurance (Wealth) by 2025. This ambition
was formally approved at the Wealth ESG forum in 2021.
In 2024, Wealth’s SRI AuM grew to EUR 88.8 billion 60: EUR 63.5 bn
in Santander Asset Management and EUR 25.3 bn from third party
funds in Private Banking.
This growth owes to the integration of sustainability into our
investment product and service strategy and the traction generated
by EU regulation.
We calculate Wealth’s SRI AuM and the metrics related to SAM’s
net zero by 2050 ambition every month. We process and store
these data in our own repository, and perform monthly variation
control and validation. An automated report on these data is sent
to the Group’s Sustainability data office every quarter. These data
are subject to an annual limited assurance audit prior to disclosure.
Wealth defines SRI as the volume of AuM classified under Articles
8 (promoting environment and social characteristics) and 9 (with
distinct sustainability objectives) of the SFDR (EU Reg. 2019/2088),
except illiquid investment in Private Banking, which we report as
committed capital. SRI includes: i) assets that SAM and other Group
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asset managers in the EU (and other regions where the SFDR
doesn’t apply, using equivalent criteria) manage or advise on; and
ii) third-party funds and advisory assets considered sustainable
investment according to the SFDR (Article 2.17) or under internal
SFICS sustainability standards.
Santander, through SAM, manages SRI assets through the SRI
policy, the Engagement policy, and the Voting policy. Santander
Private Banking Gestión (SPBG), our Private Banking asset
manager in Spain, also has its own Engagement policy. Our
investment product and service proposition meets the SFDR’s
transparency obligations, which require disclosure of information
on the embedding of sustainability risk, analysis and management
of adverse impacts on sustainability, ESG factors, and sustainable
investment targets.
The SRI policy sets out SAM’s socially responsible investment
approach and the standards we consider to embed ESG variables in
our investment analysis and decision-making. The Voting policy
outlines the principles and guidelines regarding the right to vote in
portfolio companies, facilitating alignment with the SRI policy to
promote the strong performance of long-term investments. Last,
the Engagement policy dictates the principles that govern SAM's
individual and collective engagement activities with the companies
it invests in.
The SAM board of directors approves and oversees the SRI policy.
SAM’s SRI team informs the local units of any revision of, or
amendment to, this policy so that they adopt it correctly and,
where appropriate, adapt it to local needs. Moreover, SAM’s SRI
strategy and monitoring forum oversees the monitoring and
coordination of SAM’s SRI strategy, as well as compliance with the
SRI policy and monitoring and control of all activities to embed SRI
in SAM.
SAM publishes its policies on its official website, as well as on the
Intranet for employees. The third-party regulations and initiatives
that SAM has pledged to uphold or that inspire our policies feature
in section 3 of our SRI policy, appendix II of our Voting policy, and
section 3 of our Engagement policy. SAM España and Santander
Pensiones have been working since 2023 to achieve full alignment
with the Spanish Stock Market Authority's (CNMV) Stewardship
code (to which they are signatories), reporting annually on the
activities they carry out to comply with each of its principles. In
2024, SAM published its first SRI report. It includes information on
voting and engagement and details on its SRI practices. It offers a
comprehensive view of how SAM embeds sustainability in its
operations.

SRI AUM (EUR billion)12

32%
2024 vs 2023

Santander Asset Management
As at December 2024, SAM held EUR 63.5 billion in SRI assets (32%
year on year) spread across eight countries. This accounts for
26.9% of SAM's total AuM and contributes towards Wealth’s
objective of EUR 100 billion in SRI AuM by 2025.
In 2024, we continued to broaden our SRI product and service
range, with a focus on the transformation of pension plans in Spain
and Portugal under Article 8 of the SFDR. We also launched new
products such as Santander GO Global Environmental Solutions
and Santander Target Maturity III. We enhanced our voting and
engagement policy and methodology for non-EU asset managers.
In 2024, we continued to focus on engaging with portfolio
companies in high emitting sectors. As in previous years, we took
part in the ‘Global Investor Statement to Governments on the
Climate Crisis’ initiative.
SAM’s governance backs the execution of its SRI strategy. It follows
environmental (including climate change), social and corporate
governance (ESG) standards and is organized around i) an SRI
strategy and oversight forum; ii) a voting and engagement forum;
and iii) an investment and sustainability forum led by our global
team of SRI experts. At the highest level is the ESG Wealth
Management & Insurance forum, chaired by the Global Head of
Wealth; it discusses, oversees and monitors the global SRI strategy
and the SAM, Private Banking and Insurance KPI.
SAM's ESG policies and relationship with the
Group’s sustainability documents

Other Group policies: • Defence policy • Environmental, social and climate change risk management policy |  | Grupo Santander Responsible banking and sustainability policy
| SAM SRI policy
|  | SAM Voting policy |  | SAM Engagement policy

| Grupo Santander Conflict of interest policy
SAM Conflict of interest policy

SAM has a global, multidisciplinary team of SRI experts that
develops and implements our ESG methodology, engagement and
voting activity and SRI policies, among other tasks. There is also a
local network of ESG experts for each of the markets where we
operate.
Moreover, we have a network of experts who are key to
embedding sustainability in our investment and reporting both
globally and locally.

| For more details on our ESG approach in SAM, see santanderassetmanagement.com/sustainability.

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| For more information on our engagement and voting strategies, see santanderassetmanagement.com/ sustainability/es/content/ view/11966/file/SAM_Informe_Stewardship_221123_ES.pdf

SAM’s SRI products
SRI products in SAM’s core markets
ESG methodology and business engagement
SAM runs several exclusions set out in its SRI policy that restrict or
prevent investment in certain sectors that are considered
unsustainable.
It also has its own analysis methodology based on market
benchmarks and core international frameworks and standards,
which enables it to assess the ESG performance of assets through
ratings awarded to issuers.
In 2024, we bolstered our methodology by revising the materiality
matrix and the data we analyse to identify the issuers that are best
positioned to manage sustainability related challenges and
opportunities, while generating value for both their businesses and
broader society.
We define ESG factors based on the relative impact of each
industry and its exposure to associated risks and opportunities that
arise from changes in policies and regulations, technology, supply
and demand, and stakeholder perception. We assign the ESG
factors identified for each industry a weighting within the model,
based on their materiality. The final ESG rating is the sum of the
weighted average of each key matter.
SAM uses its own criteria to determine whether an issuance can be
considered sustainable investment according to Article 2.17 of the
SFDR in order to meet the minimum percentage of sustainable
investment that characterizes the fund or investment or savings
solution.
This analysis draws on the information provided by ESG data
providers and SAM's weighting and materiality assessment
methodology.
Our methodology identifies over 30 key ESG matters where issuers
can generate environmental or social externalities that could
translate into material impacts for the issuer, therefore
representing risks and potential opportunities.
Our ESG rating analysis comprises these elements:
• Environmental factors: Any component of the issuer’s activity
that may represent an environmental issue such as greenhouse
gas emissions, resource depletion, pollution, water
management, and others.
• Social factors: Society-related matters that include workplace
issues, labour standards, talent management, relationships with
local communities, data privacy and security, and human rights.
• Governance factors: To assess the quality of the issuer’s
management, culture and ethics; the effectiveness of its
governance systems to minimize the risk of mismanagement;
and its ability to anticipate operational and legal risks that could
lead to non-compliance.
We conduct multidimensional analysis on how each company
manages these factors. It includes the existence of policies, target
analysis, integration of management systems, performance of key
performance factors, and other elements.
Outside the EU, we are making progress in training investment
teams to embed ESG assessment and sustainable investment
methodologies and standards with an approach that makes sense
in each jurisdiction, as well as increasing the coverage of our data
providers in certain markets (especially Latin America and Poland).
Engagement activities comprise constructive dialogue with
investees about sustainable investment objectives and the
qualitative and quantitative ESG factors that impact on them. This
exercise can have varying aims: i) to drive their behaviour and
activities towards enhancing transparency; ii) risk management
and the opportunities associated with ESG factors; and iii) the
impact on the sustainable investment objectives that particular
investments or savings solutions pursue. Our Engagement policy
sets out internal procedures, forms of engagement and different
escalation processes where targets are not achieved.
Last, SAM exercises its right to vote independently in the
companies it invests in under the scope and criteria outlined in its
policy, which strengthens its influence on ESG and sustainability
issues.
Insurance
In 2024, we focused on developing products to safeguard
vulnerable groups and reflect situations in specific contexts or
markets that have little protection. We’ll continue to cooperate
with our partners to promote this product offering and boost the
management of our insurers’ SRI investments.
Private Banking
Private Banking is contributing towards the objective of EUR 100
billion of SRI AuM in Wealth by 2025. Our third-party funds SRI
AuM amounted to EUR 25.3 billion at 2024 year end, including
committed capital to alternative funds.
In 2024, our global list of funds that are subject to advisory to
clients comprised mostly SFDR Article 8 and 9 funds in the EU.
In 2024, we introduced new social metrics in the sustainability
reports on the portfolio for our International Private Banking (IPB)
61 To the extent required by applicable law, customers and transactions involving activities enumerated in this section will be subject to an enhanced due diligence process to
determine the unique risks presented prior to decisioning.
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clients and published a series of papers for our Private Banking
clients available on our global website, including papers around
investment in climate adaptation vs mitigation, the evolution of
businesses from a linear to circular economy, or green hydrogen
and the energy transition.
We will embed ESG services in portfolio management and advisory
services according to our clients’ investment needs.
In 2024, Global Finance named us 'Best private bank for Social
Responsibility' while Euromoney named us 'Best private bank for
Sustainability' in Chile.

| For more details, visit our website santanderprivatebanking.com

3.2.3 Environmental, social and climate
change management
This section outlines how we manage these IRO:

| I- | Finance activities (in any customer segment) that breach of the bank’s policies and jeopardize the well- being of present and future generations. |
| I- | Potentially negative impact on the environment or society by failing to sufficiently involve stakeholders or use suitable customer identification and management mechanisms when providing finance to a customer or project. |

i. Our ESCC policy
Grupo Santander recognises environmental and social issues (E&S)
pose some of the biggest challenges for the long-term prosperity
of the global economy, the well-being of people and society, and
the ability of the natural environment to support life.
Santander pledges to help customers and economies in their
efforts to transition to a low-carbon economy, by providing
financial products and services based on their context and
approach to environmentally and socially responsible business
operations. This is an ongoing effort — at different rates
depending on the market and with several external dependencies
such as public policy, technological advances, consumer needs
among other factors — requiring continuous engagement with
customers in their transition to a low-carbon economy . It is also
important that we monitor social issues that may arise, such as the
involuntary displacement of local or indigenous populations, the
health, safety and human rights of workers, and the impacts of
business activities on communities and other stakeholders.
To support our fight against climate change, the Group will
promote supporting customers navigate the transition to a low-
carbon economy.
Grupo Santander:
• By 2030, will stop investing in, and/or providing financial
services to clients for whom coal fired power generation
represents directly more than 10% of revenues on a
consolidated basis;
• No exposure to thermal coal mining worldwide by 2030; and
• Supports international standards and treaties.
Santander embeds environmental and social standards in risk
management, focusing on priority sectors to support sustainable
and inclusive growth and uphold human rights.
The Group applies the precautionary principle to the analysis and
management of its main ESCC risks.
Our ESCC risk management policy (which is reviewed annually)
defines the standards for investing in and, providing financial
products and services to, companies and customers in oil & gas,
power generation and distribution, mining and metals, and soft
commodities (with particular focus on the financing of retail
customers with activities dedicated to farming and ranching in the
Amazon). It dictates prohibited activities 61 and those that require
special attention for the aforementioned sectors.
For the purpose of this policy, we define financial products and
services as transactions that entail credit risk, insurance, advisory
services, equity, and asset management.
From a social perspective, the ESCC policy follows international
standards and benchmarks such as the United Nations Global
Compact, the Universal Declaration of Human Rights, the
International Labour Organisation Declaration, the Convention on
the Rights of the Child, the Rio Declaration on Environment and
Development, the United Nations Convention against Corruption,
the Equator Principles, and the standards for social and
environmental performance and the explanatory notes of the
International Finance Corporation (IFC).
The policy states that Grupo Santander will not directly invest in, or
provide financial products and services to any of the following
activities across any customer segment:
• Projects or activities for oil & gas extraction, power generation
or transmission, mining, manufacturing, plantations or other
major infrastructure projects that put areas classified as
Ramsar Sites, World Heritage Sites or categories I, II, III or IV by
the International Union for Conservation of Nature (IUCN) at
risk.
• Projects that require free, prior and informed consent (FPIC)
according to the IFC Performance Standard 7 – Indigenous
Peoples and that fail to meet the standard, with no credible
action plan to achieve compliance.
Moreover, we conduct a detailed analysis on CIB clients that
operate in sectors subject to the ESCC policy, including any activity
that entails the resettlement of indigenous populations and/or
other vulnerable groups.
62 Sectors covered by the ESCC Risk management policy and additional tactical sectors included in the CIB Procedure, as well as other material businesses and sectors
depending on the geography and local legal requirements.
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We conduct environmental, social and climate change
assessments in accordance with established procedures. These
assessments are part of the risk management and control of our
credit approval and investment decision work flows and
governance. Since the Group's board of directors owns the policy,
the individual or collective authorities that sanction these risks are
responsible for ensuring that decisions are made in consideration
of environmental, social and climate change risk and of the policy’s
standards.
Clients in applicable sectors 62 are assessed through a questionnaire
completed by the financial manager, which is then reviewed by a
team of analysts to perform a global ESCC risk assessment. ESCC
assessments of Santander’s CIB clients cover child labour, forced
labour, workplace discrimination, freedom of association, working
conditions, complaint mechanisms for employees and impacts on
communities in relation to their own operations and their supply
chain.
The ESCC risk and compliance departments deepen into cases that
uncover red flags. We usually conduct this extended due diligence
exercise alongside the client to deepen our understanding of issues
and determine the existence (or not) of corrective or remediation
measures. Moreover, in the client ESCC risk assessments, we
analyse the existence and effectiveness of reporting channels
available to affected communities, to understand if a process is in
place to avoid and manage adverse impacts on communities due to
their own activities or those of their supply chain.
The findings of the analysis (and its impact on credit and other
risks) are escalated to the bank’s risk approval committees and are
considered in decision-making process.
According to the methodology we use to analyse customers’
climate transition plans, we carry out an annual assessment of
ESCC risk for CIB clients in sectors where we have set alignment
targets (oil & gas, power generation, automotive, steel, and
aviation) to classify them based on their greenhouse gas
emissions, emissions targets, and transition risk management.
We continued to consider how ESCC risk affects our customers so
as to make our risk assessments more rounded and offer
customers support in their transition.
In 2024, the ESCC risk and compliance departments continued to
work with the business units to strengthen the governance and the
management of these risks in sustainable finance transactions. Our
groups of experts responsible for reviewing and classifying
operations as sustainable are the cornerstone of our risk
management for these transactions.
In addition to the analysis performed by the ESCC risk teams, the
Financial crime compliance (FCC) teams establish controls to
mitigate the environmental crimes detailed in the next section.

| For more details on environmental, social and climate change risk management, see section 2.3.2. 'Risk management cycle'.

ii. Equator Principles
The Equator Principles (EP) are a voluntary framework for financial
institutions to identify, assess and manage environmental and
social risks when financing projects. We have been a signatory to
the EP framework and applied these principles to project-related
transactions (especially project and export finance) since 2009
according with its scope.
The Group has an internal procedure to manage the environmental
and social (E&S) risks of project-related transactions. This
procedure guides the application of the EP. The assessment of
transactions that potentially require us to apply the EP starts with a
preliminary assessment conducted by the Front Office. The area
that manages ESCC risk under the EP sits in Santander CIB. CIB’s
ESCC Risk team oversees the Front Office’s preliminary assessment
and provides it with ad-hoc training and support. We conduct an
environmental and social risk review for applicable transactions,
based on the preliminary assessment findings. This review follows
these guidelines:
• For projects with minimal or no adverse environmental and social
risks and/or impacts (category C), the initial assessment is
considered sufficient.
• For projects with potential limited adverse environmental and
social risks and/or impacts that are few in number, generally
site-specific, largely reversible and readily addressed through
mitigation measures (category B) in designated countries, the
Front Office must complete a due diligence questionnaire that
includes the findings of the E&S risk assessment. The ESCC risk
area provides guidance throughout this process.
• For category A (with potential significant adverse environmental
and social risks and/or impacts that are diverse, irreversible or
unprecedented) and B (projects that involve high-risk factors or
are in non-designated countries), the ESCC risk area manages the
due diligence procedure and prepares an E&S risk assessment
report.
The findings of the E&S assessment form part of the application for
financing that is submitted to the risk approval committees before
a decision is made.
If approved, we continue to apply the Equator Principles when
preparing all subsequent contractual documents, closing the
transaction, and monitoring.
In the monitoring phase of a transaction, compliance with the E&S
clauses, the implementation of the corresponding E&S Action Plans
and compliance with the applicable E&S standards are monitored.
When a transaction or material incident is identified during the life
of the operation, measures could be taken in accordance with the
provisions in the credit agreement, such as, for example, requiring
the implementation of a Corrective Action Plan.
In 2024, we analysed 21 projects that fell within the scope of the
Equator Principles (for more details, see SN.7.1. Green transition,
table 5. 'Equator Principles').
63 Includes universities, institutions and organizations that have an agreement with Santander Universities, Universia, Fundación Universia and Fundación Banco Santander.
With activity from Santander Universities alone, the figure is 939 academic entities in 11 countries. Since 2024, Universia reports only agreements signed in the geographies
where the Group operates.
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|  | Risk/impact management in local communities |
| As part of our due diligence under the EP, we assess and ensure that projects identify and manage environmental and social risks and impacts correctly and that they maintain a sound relationship with local communities according to international standards. We pay special attention to, and ensure the correct management of, these situations as potential impacts of projects on communities: • Involuntary resettlement/displacement (physical or economic) of people. • Risks to the health and safety of neighbouring communities. • Impacts on indigenous communities. In these cases, the project must obtain free, prior and informed consent (FPIC) under IFC Performance Standard 7. |

iii. Management of principal adverse impacts
(PAIS)
Asset management activities could generate non-intentional
adverse impacts on society and the environment. Banco Santander
and its asset management businesses disclose and manage the
potential adverse impacts derived from the management of its
portfolios, through the measurement of representative KPI of the
main sustainability factors as detailed in the PAIS procedure
document from SAM. When an adverse impact is detected, several
aspects are assessed towards establishing mitigating mechanisms.
Among others, we consider: impact severity, frequency, success
rate of dialogue initiatives and level of exposure.
3.2.4 Community Support
This section outlines how we manage the following IRO:

| I+ | Contribution to education, employability and entrepreneurship, as well as to community development through support programmes. |

i. Our approach
We support the communities where we operate by helping them
address their social needs.
Santander's community support focuses on higher education,
employability and entrepreneurship, complemented with the
support on financial education and to vulnerable people.
Moreover, we have a strong track record in supporting cultural and
other social initiatives.
We make donations and other contributions to projects and
initiatives either autonomously or in cooperation with other non-
profit organizations and entities that share similar aims.
Santander has a sensitive issues policy, integrating the activity of
donations, as well as a Guide on Community Support and People
Helped, inspired by the Business for Societal impact (B4SI)
standards. This Guide sets out the methodology for quantifying the
contributions that both the parent company and our subsidiaries
make. We also have a humanitarian crisis guide that outlines
Santander’s response to events or disasters with a social impact.
ii. Support for higher education, employability
and entrepreneurship

103.8 | 2.2 | 1,181
million euros of support | million people and businesses helped | partnerships with universities and entities in 14 countries 63

Santander has supported education, employability, and
entrepreneurship for over 28 years.
During this period, we have invested over EUR 2.4 billion in
partnership with more than 1,100 universities and entities, helping
over 3.7 million people and businesses. In 2024 alone, we
allocated EUR 104 million to promoting education, employability
and entrepreneurship, and helped 2.2 million people and
businesses. This reinforces our objective with EUR 400 million
between 2023 and 2026 in these three pillars, that supports our
purpose to help people and businesses prosper. Until 2024 we
have allocated EUR 208.9 million against this ambition.
We help higher education institutions enhancing the university
ecosystem through partnership agreements. We also help adults
access and complete their higher education studies through grants
and scholarships. Through lifelong learning opportunities, they can
acquire and update the skills that will enable them to boost their
job prospects. We provide training, resources and other benefits to
help businesses and entrepreneurial projects create opportunities,
grow and transform through each stage of their development.
1. Education
Our support for education involves grants and scholarships for
students and researchers to access and complete their higher
education studies. We also help universities to face their main
challenges and strengthen their transformation in different areas,
with a special focus on digitalisation. We do this through:
→ Scholarships and grants awarded in collaboration with
universities and institutions of international prestige, which help
with access to university, academic mobility, research or the
opportunity to do internships.
→ Agreements signed with 1,181 universities, institutions and
organisations in 14 countries.
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→ Campus Digital, which offers an innovative relational model
improving the life of the university community. It streamlines
academic procedures and communications through an easy and
simple experience, adapting to users’ needs, and ensuring data
privacy. It offers services such as digital credentials, tuition fee
payments, certificates, schedules and discounts.

| For more details, visit the website mycampusdigital.com

→ Universia Network, represents a global space for meetings,
cooperation and joint reflection between universities in the
Ibero-American higher education area.
→ MetaRed is a collaborative network of heads of public and
private Ibero-American higher education institutions to discuss
and work together on three of the biggest challenges that
universities are facing: digital transformation (MetaRed TIC),
university entrepreneurship (MetaRed X), and sustainability
(MetaRed ESG).

| For more details, visit the website metared.org

2. Employability
Our ambition to help people prosper through their upskilling and
reskilling is embodied in our support for lifelong learning. This is a
necessity demanded by both companies and society in order to
respond to current and future challenges. Moreover, we facilitate
access to employment in the early professional stages.
→ Santander Open Academy is a global platform for learning and
professional development that offers, to any person, access to
training to have better job opportunities.
It offers free courses and open learning for skills in high demand
by the labour market.
I n 2024, we launched short, direct access courses with unlimited
seats and a certificate for participants to expand their knowledge
and boost their skills anytime, anywhere.

| For more details, visit the website santanderopenacademy.com

→ Universia is the platform through which Santander guides and
posts job offers for young graduates and students who are
coming to the end of their studies. It uses artificial intelligence to
help them draw up their professional profile and uses online
tests to measure their skills.

| For more details, visit the website universia.net

→ Fundación Universia, a recognised international organisation,
which participates in international forums of the United Nations
and the International Labour Organization on topics related to
inclusive culture. We bolster improvement of quality of life for
people with disabilities and other vulnerable groups in
educational and work environments.

654 |  | 1,180 |
scholarships and courses for students with disabilities and other vulnerable groups |  | people with disabilities and other vulnerable groups hired by companies |

| For more details, visit the website fundacionuniversia.net

3. Entrepreneurship
We help SMEs create opportunity, grow and transform.
→ Santander X, a global initiative that provides access to training,
advice and resources (including benefits) needed to launch, scale
up and transform a business.
We help entrepreneurs showcase the most impressive projects
and connect with other businesses through Santander X 100, a
dynamic, global community that offers them unique benefits.

| For more details, visit the website santanderx.com

64 It includes the social contributions of the foundations linked to the Group.
65 Based on the People Helped internal methodology, which considers international best practices. Calculated with partners’ certified data or with conservative estimates based
on recognized conversion factors.
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iii. Other community support programmes.
Social action
We aim to complement our support for higher education,
employability, and entrepreneurship, mainly through financial
education and supporting vulnerable people.

62.5 |  | 2.9
EUR million in other community support programmes 64 |  | million people helped 65

Financial education | Vulnerable people | Arts and culture
Enhanced knowledge and understanding of financial products and services | Reduced risk of exclusion and better quality of life for vulnerable people | Promote cultural events and programmes

On top of direct community action, we cooperate with, and channel
our support through, local NGOs and social charities. Some
partnerships are with the bank’s foundations in Argentina, Spain,
the US, Mexico, Portugal, Poland and the UK.
We target our support on different groups depending on their
needs. Our support for vulnerable people focuses on sensitive
groups (due to gender, disability, age, lack of digital skills, financial
difficulty and other reasons). We usually target cultural activities
at the general public, although we also include vulnerable groups
to facilitate their access to events and programmes.
Volunteering
At Santander we encourage our employees to volunteer in
initiatives that help the communities where we have a presence.
These initiatives, which the Group promotes and supports, seek to
get employees to dedicate their time and use their skills and talent
to support charitable causes, non-profit projects and organizations
that benefit society.
Corporate volunteering is a valuable way for employees to engage
with the community and contribute to a social cause. In particular, it
aims to:
→ contribute to the Group’s community support objectives through
the direct involvement of Group employees in volunteering
programmes;
→ foster a culture of inclusion by breaking down prejudices and
stereotypes;
→ enhance our employees’ skills and work environment through
collaboration; and
→ contribute to the well-being of our employees through
experiences that provide satisfaction, purpose and pride of
belonging.

75 k
working hours volunteered

We have a global corporate volunteering guide that sets out a
common framework for this activity. Moreover, each subsidiary
runs initiatives based on the specific needs of its market. For
instance:
• In Brazil, we offer volunteering opportunities related to financial
education, entrepreneurship, employability and upholding the
rights of children, teenagers and senior citizens. The programme
also encourages Volunteering Groups, which carry out continuous
and autonomous actions, and are a reference for mobilizing and
involving other employees through the Volunteering Programme.
• At the Corporate Centre, we run initiatives to support the inclusion
in the job market, mentoring programmes to help women victims
of domestic violence find work, and coaching programmes to
prevent early school-leaving.
• In Chile, we support students in their transition to higher
education through a tutorial programme and give financial
education to schoolchildren across the country through the
“Misión Ahorro” programme. We also run emergency operations
to help build basic shelter for people left vulnerable following
fires or earthquakes.
• In Spain, on top of local activities that we run at our branches, we
execute flagship projects such as the ‘Finanzas para Mortales’
financial education programme, where our employees teach
financially vulnerable groups; the ‘Santander Natura’ programme,
where employees and their families help preserve the
environment; and our Pro Bono volunteer programme, where
volunteers’ expertise helps solve the challenges that NGOs face
so that they can continue to perform their work.
• In Mexico, we run numerous volunteering initiatives with a special
focus on reforestation and habitat conservation, such as Rally del
Ajolote (sporting events and reforestation) and a beach clean-up
programme alongside WWF (World Wildlife Fund) México.
• Through Santander Tuiio, we delivered financial education
sessions in schools to elementary education children on personal
finance basic concepts, as well as delivering the financial health
book "My first steps in finance".
66 For more details, see Note 34 ‘Other equity instruments and own shares' in the 'Consolidated financial statements'.
67 For more information on employee dialogue, see section 1.2 of Dialogue with our stakeholders.
68 The actions outlined in this section are specific to Santander and not sector-wide
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Financial education
Financial education is a key component of community support. It
aims to boost citizens’ financial skills by providing the necessary
tools and information to understand products, concepts and
financial risks for better use and decision-making.
Santander promotes financial education through several initiatives
that target the general public, with tailored content based on age
and needs to foster financial inclusion and better financial health.
In addition, and as outlined in examples above, financial education
is a core component of volunteering initiatives across the bank.
Our initiatives follow international standards such as the OECD
Principles, as set out in our guide to financial education, which also
outlines the criteria for counting the number of beneficiaries.
We are also exploring different channels to foster financial
education content and reach specific audiences, such as the use of
social media as a way to engage with younger people on this
subject.
In 2024, 4 million people accessed our financial education
initiatives and content, which in social media considers only people
engaging with the content (not the reach of the activity).

| For more details on financial education, visit our website santander.com/ es/nuestro-compromiso/crecimiento- inclusivo-y-sostenible/educación- financiera

Humanitarian crises
As an international bank that operates in several regions and
markets, Santander is sensitive to global situations that can affect
the well-being of individuals and communities. That's why we
have a procedure to oversee our response to humanitarian crises.
We assess the severity of crises according to their scale and
urgency following our corporate guide, which sets out the
framework of action and governance for each situation. This helps
make the bank’s response to unexpected events as efficient and
effective as possible.
In 2024, we analysed such events as the dana storm in Valencia
(Spain), forest fires in the Valparaíso region (Chile), the floods in
Rio Grande do Sul (Brazil), the earthquake in Gansu and Qinghai
(China), and others.
In the case of the dana storms in Spain, since it devastated Valencia
and its surroundings with special virulence, as well as other
municipalities in Castilla-La Mancha and Andalucia, the Santander
Group has been in contact with the teams in the affected areas and
has implemented different measures to support and help both our
clients, our teams and their families as well as the rest of those
affected by the floods. Additionally, the Group has been in
permanent contact with different NGOs, which are acting on the
ground, to better understand their needs and channel the aid from
the Group, that of our clients and employees in the best possible
way.
Charitable foundations
Fundación Banco Santander, which is based in Spain, works to
build a fair, inclusive and sustainable society by financing and
running several cultural, educational, social and environmental
projects.
In 2024, Santander made a donation to Fundación Banco Santander
for a total of 22,167,105 Banco Santander shares. The donated
shares are meant to help the foundation financially; it can use the
dividends to cover some (if not all) of the cost of fulfilling its
founding purposes. 66 These include managing the bank's art
collection and financing numerous literary, educational, social,
cultural and environmental productions and activities, in which the
remodelling of the Santander's headquarters on Paseo de Pereda
in Santander and our relations with universities in Spain will play
an important role.

| For more details, visit the website fundacionbancosantander.com/es/ fundacion/transparencia.

We have other Santander foundations in countries where we
operate (Argentina, the US, Mexico, Portugal, Poland and the UK),
which boost the number of initiatives we run. Their focus varies
according to local needs; for instance, in Argentina on art and
culture; in Portugal on education, inclusion and culture; and in
Poland on education for children and young people. Activities from
these foundations are aligned with the bank’s community support
priorities.

| For more details on our foundations in other countries, visit the websites esg.santander.pl (Poland), fundacionsantander/argentina (Argentina), and fundacaosantanderportugal.pt (Portugal).

3.3 Our customers
Our customer-centric approach is a fundamental lever for
generating sustainable value 67, building a digital bank with
branches and a multi-channel offering that covers all of our
customers' financial needs. We operate through five global
business segments that provide services to various types of clients,
including individuals, small and medium-sized enterprises, large
corporations, and public entities, among others 68.
This chapter focuses on individual customers who use the products
and/or services offered by the Group and establish a contractual
relationship with it. Include those clients who, due to their
circumstances, may be particularly vulnerable to the marketing of
products and services.
Impacts resulting from relationships with corporate clients are
discussed in section 3.2.3 of Environmental, Social, and Climate
Change Management.
69 For more information on our human rights commitment to our customers, see section 1.4 on our commitment to human rights.
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3.3.1 Conduct with customers
In this section we cover how Santander manages the following
IRO:

| R | Potential losses due to claims or a reduction in the numbers of customers because of inadequate customer practices throughout their life cycle. |
| I- | Negative impact on the customer if the bank fails to provide sufficient information on the product or service they are signing up for. |
| I- | Negative impact on the customer if they do not have access to complaints channels or if, after making a complaint, the bank fails to take the necessary action. |

i. Customer conduct principles
Customer conduct risk model
Our customer conduct risk model approved by compliance and
conduct committee, sets out the principles that underpin how we
align customer engagement with our Simple, Personal and Fair
culture and how we make that the products and services we offer
adapt to our customers’ needs while protect their rights 69. This
model also outlines the key processes, instruments and
governance that enable us to mitigate and manage customer
conduct risk at every stage of our relationship with them (product
and service design, sales and post-sales).
Model principles
→ Fair treatment
→ Customer-focused product and service
design
→ Transparency in all customer
engagement
→ Responsible sales practices
→ Responsible pricing
→ Consideration of vulnerable customers
or those in special circumstances, and
prevention of overindebtedness
→ Personal data processing
→ Complaints handling
→ Financial education
→ Safeguarding consumer assets against
fraud and misuse
Key processes
→ Approval and ratification of products
and services (Product and service
approval policy)
→ Customer conduct training
→ Sales oversight, with special focus on
the classification and suitability of
products and services; advertising and
transparency at the point of sale; and
monitoring
→ Remuneration of sales and support
teams (Remuneration policy)
→ Post-sales oversight, with special focus
on recoveries, fraud management and
complaints handling (Customer service
and dissatisfaction management policy)
→ Managing vulnerable customers and
preventing overindebtedness
(Vulnerable customers and prevention
of overindebtedness policy)
Governance and remit
→ Our Product governance and consumer
protection area, part of the Compliance
and conduct unit, develops and
oversees how we follow our customer
conduct risk model
→ The board of directors oversees the
Product and service approval policy,
while local and corporate product
governance forums assess and approve
our products and services
→ The board is also responsible for the
Group Remuneration policy, while the
remuneration and risk committees, with
the support of the Human Resources
and Compliance functions, monitor this
policy’s compliance
→ Local and global compliance
committees set our risk appetite and
monitor compliance risk assessments
(including customer conduct risk)
The customer conduct risk model and the policies that underpin it
are subject to strict internal governance that ensures they are
properly communicated to all our stakeholders and transposed to
the Group’s subsidiaries. Moreover, we have several guides that
cover the key processes of the entire customer relationship cycle
and aim to help the units and functions implement internal
regulations consistently.
Consumer protection and customer conduct risk mitigation are a
basic pillar of the Group’s strategy. The Compliance and conduct
function gives shape to this through objectives and annual plans,
using a methodology to monitor their effectiveness, determine the
customer conduct risk profile in each unit, and set any appropriate
correction measures.
In 2024, the Group focused on implementing the European
Accessibility Directive in the applicable units, with specific plans to
facilitate the accessibility of products, services, and channels,
considering the necessary technological developments and user
experience improvements.
Our risk appetite metrics for claims and internal events enable us
to detect and manage customer queries and issues effectively and
proactively. In 2024, while disputes related to mortgage fees in
Spain and Swiss Franc mortgages in Poland impacted these
metrics, our contact centres and protocols provided an appropriate
response and solution for our customers.

| For more information on internal conduct events, see Note 25 of the annual accounts.

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ii. Product and service marketing and design
Product and service governance
The purpose of the Product and service approval policy is to set out
the standards, processes and controls so that we design products
and services according to the customer conduct risk model
principles. This means products and services with appropriate
features to meet the target audience's needs, reasonable pricing,
and transparent marketing (i.e. the information we give to
customers uses simple language and a clear format; is accurate
and sufficient data; and is consistent and comparable so that
customers can cross-check it with similar financial products and
services). This transparency applies to all advertising, pre-
contractual and contractual information, as well as throughout the
product or service life cycle and across all channels.
The local and corporate product governance forums are
responsible for implementing this policy. These forums are able to
draw on document and assessment templates, which includes a
review of contractual and briefing material on each product and
service. We only approve products and services if all forum
members vote unanimously in favour of them.
Conduct training
Training is a key way to boost knowledge of consumer protection.
The Compliance function, with the support of Human Resources,
draws up mandatory refresher training for all employees on
managing and mitigating customer conduct risk. This course has a
satisfactory compliance rate in ev ery country. Moreover, every unit
ensures strict compliance with the regulatory authorization
required to provide services to customers in each country(e.g.
MiFID licences in Europe). They also devise and monitor specific
training programmes to arm sales teams with the necessary
expertise to inform about and sell the products and services we
offer.
Quality and conduct metrics in sales teams’
remuneration
The Group follows a rule for at least 40% of sales units variable
pay to be based on quality and conduct metrics. This promotes
greater awareness and proactive and effective management of
customer conduct risk, has a positive impact on transparency with
customers, and helps us identify appropriate target audiences.
Sales monitoring
The Group has mechanisms to monitor products and services
throughout their life cycle. These enable us to detect and manage
(as early as possible) deterioration, failures in marketing and non-
compliance with the terms and conditions under which they were
approved. We analyse and monitor:
• Customer Voice: queries, complaints and surveys, are a key
source of information to identify deficiencies in marketing and
customer engagement, and to draw up improvement plans; and
• Sales metrics and controls: monitoring of the percentage of
product or service cancellations shortly after sign-up. In 2024,
this analysis allowed to set up improvement plans to strengthen
welcome communications in different consumer entities,
through telephone sales channels in Mexico and the governance
of commercial campaigns in Poland.
iii. Post-sales
Conduct in fraud management
In July 2024, we embedded the guidelines for conduct in fraud
management in the Grupo Santander Fraud policy, which was
adopted by our subsidiaries in the second half of 2024. Moreover,
following an internal review on conduct in fraud management in
2023, local units worked on aligning their improvement plans with
Group standards in 2024. These plans include combining digital
channels to register cases of fraud, bringing together customer
voice in Group taxonomies, enhancing customer communications
related to fraud cases, and bolstering controls in the first and
second lines of defence in terms of conduct towards fraud victims,
with special attention to vulnerable customers. They cover the
period 2024-2026.
We also have additional fraud management controls based on NPS
and quality assurance.
Complaints handling
In 2024, we conducted a review of the channels on which
customers can raise queries or complaints. The Customer service
and dissatisfaction management policy outlines the principle of
making multiple channels available to avoid the potential impact of
not having adequate means for customers to convey their issues or
dissatisfaction and to promote that we have channels that adapt to
our customers’ needs and preferences.
Additionally, customers can escalate complaints through external
channels, such as the Financial Ombudsman, regulatory bodies,
and consumer agencies, if they are not satisfied with the entity’s
resolution.
Most of our units are investing in digital channels to speed up case
resolution and help customers self-manage certain queries, as well
as to manage expectations better. Root-cause analysis governance
and mitigation plans are an essential component of continuous
improvement.
The units analyse customer complaints to identify their root causes
—such as deficiencies in products, services, systems, channels, or
communications—their impact, and the teams responsible for
resolving them. These teams must submit clear action plans
outlining what will be done, how, and when. Senior management
regularly monitors progress and effectiveness. In 2024, all
countries advanced in this area, with Spain leading efforts by
strengthening governance and setting specific objectives. As a
result, it achieved a 19% reduction in claims (excluding sector-wide
events).
We have established a global, multidisciplinary working group to
enhance our queries, requests and claims procedures and
platforms. This includes embedding artificial intelligence in case
registration and analysis.
Santander Brasil, in collaboration with the global Consumer
Protection and Models and Data functions, developed “Viva Voz”, a
tool that uses artificial intelligence to handle large volumes of
information and delve deeply and q uickly into the root cause of
customer complaints. W ith this tool, it has gone from analysing 3%
of cases in two days to analysing 60% in one day and is aiming to
reach 100%. Similarly, Santander España an d Polska are piloting
artificial intelligence solutions to enhance customer claims
management.
70 Approved in November 2023
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Complaint type A (%)

Resolution A (%)

A.The Group uses the same standard claims metric for all geographies.
iv. Vulnerable customers
In this section we cover how Santander manages the following IRO:

| I- | Negative impact on the customer by failing to guarantee access to, or the use of, products and services that may present certain obstacles or weak spots. |

The management of vulnerable families and businesses is a key
pillar of Grupo Santander's strategy, as it can make a difference to
performance, perception and long-term sustainability. We
identified and considered our customers’ difficulties and
vulnerabilities, and trying to mitigate their potential impact. In
2024, we continued to make headway with embedding Group
regulations 70 on vulnerable customers and the prevention of
overindebtedness in every market where we operate. The aim is to
provide a common approach and standards to avoid disparate
management between countries.
The Group is following indicators used by the units to identify and
monitor customers in special circumstances. We’re also developing
a methodology that will enable us to pinpoint potential signs of
vulnerability in order to foresee and try to adapt services to the
specific needs of certain customers.
To coordinate a common approach across our footprint, local units
met with the global team every two months in 2024 to facilitate
alignment in embedding the Group’s vulnerable customer
standards. We also launched a global training course on vulnerable
customers so that all employees consider potential vulnerabilities
and are aware of the lines of action in each case.
3.3.2 Financial inclusion and financial
health
This section outlines how we manage the following IRO:

| I+ | Positive impact on customers due to the bank’s offer of products and services that adapt to their needs and expectations and promote financial inclusion and health. |

i. Financial health and inclusion as a key driver
of social progress
Financial health and inclusion are a priority for Santander in
contributing to social progress and promoting prosperity and
entrepreneurship.
In the markets where Santander operates, there are financial
inclusion challenges that we strive to address with tailored
business solutions.
To assess the significance of our proposition, we use the World
Bank's Global Findex Database to calculate the number of
unbanked, underbanked and financially distressed people due to
access and financing issues in the markets where we operate as a
retail bank. In particular, we:
• Considered different components of financial exclusion and
aggregate indicators to cover all our target audiences.
• Defined an inclusive financial system as one that maximizes the
use of financial products and services, access and financing.
• Measured involuntary financial exclusion through barriers that
people who do not participate in the formal financial system
perceive.
• Applied a correction factor that matches our business penetration
rate in the markets where we operate.
71 For more details, visit our website santander.com/informe-inclusion-financiera.
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Our ambition is for our financial inclusion initiatives to reach five
million people between 2023 and 2025. This is consistent with our
penetration rate in the markets where we operate and with the gap
identified in our latest assessment.
Our processes pinpoint the needs of customers facing financial
difficulty; develop products and services; and train our teams 71.
These processes align with our customer conduct model,
vulnerable customer policy, and responsible banking and
sustainability policy. We set out the accounting standards for
initiatives and financially included individuals in our Financially
included people guide, which applies to the entire Group. The guide
includes these definitions:
• Unbanked: People who do not have a bank account or access to
any banking services.
• Underbanked: People who, despite having a bank account, have
difficulty accessing basic services (e.g. making deposits and
withdrawals) or source financing informally.
• People in financial distress: People who earn less than their
country’s legal minimum wage or who are unable to cover basic
living expenses.
This guide also enables us to use common metrics to monitor and
manage access and financing initiatives (listed below) that
contribute to our financial inclusion target:

People subject to inclusion measures A | Target
+5 mn B
1.8 mn | 4.3 mn |
2023 | 2024 | 2025

In 2024, we financially included nearly 1 million people through
access initiatives; and 1.6 million people through finance
initiatives.
A. Based on internal financial inclusion methodology. Includes the principles,
definitions and standards we use consistently across our footprint to count the
number of people we include financially through initiatives, products and services
for access and finance.
B. Cumulative figure since 2023.
Access
1 million
New people subject to financial inclusion
measures related to access
We want to help unbanked and underbanked people enter the
financial system and gain access to basic financial services,
encouraging them to use financial services that are tailored to their
needs and barriers, have greater control over their finances and
enjoy faster and more secure transactions.
In 2024, our initiatives continued to:
• adapt to developing and mature market needs:
▪ In developing markets, we focus on providing access to bank
accounts and cash deposit and withdrawal services to
unbanked and underbanked people. Our stand-out initiatives
include partnerships with merchants in Mexico to offer
Santander services, or the financial inclusion branches in
Argentina.
▪ In mature markets with high account penetration, but with
an exodus of people from rural areas and an ageing
population, we focus on continuity in access to basic financial
services. Stand-out initiatives include Correos Cash and the
waiving of fees for vulnerable customers in Spain.
• offer access amid humanitarian crises: making mobile branches
available to remain close to our customers in the most affected
areas and maintaining key financial services such as cash
withdrawals, salary advance and payment holiday requests, and
insurance. For more details on our actions during humanitarian
crises, see section 3.2.4 'Supporting Communities'.
• promote inclusion: we are constantly adapting branches,
products, services and channels for people with disabilities and
senior citizens to be able to access them both in person and
online.
All of this harnessing technology to drive financial inclusion,
overcoming some of the barriers that prevent unbanked and
underbanked people from accessing financial products and services.
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Access initiatives and services: |  |  |  |  |  |  |
Promoting access to cash and transactions We promote underserved communities get cash through our remote branches and agreements with private and public entities that widen our footprint. |  |  | Branches in underbanked and remote regions A |  |  |  |  |  |  |
|  | Partnerships to reach underserved communities B |  |  |  |  |  |  |
Promoting digital access We help people access the banking system so they can make payments; use basic, tailored financial services; take greater control of their finances; and make faster and more secure transactions. |  |  | Digital wallets and points of sale C |  |  |  |  |  |  |
|  | Basic accounts D |  |  |  |  |  |  |
Financial solutions for vulnerable groups We offer financial support to vulnerable groups so customers will have access to basic products and know how to use them. |  |  | Support to senior citizen customers E |  |  |  |  |  |  |

We also have global initiatives such as GetNet, which provides
digital payment services to individuals and merchants with a
wide range of payments solutions, boosting simplicity, speed
and security, that reaches underbanked segments improving
their financial inclusion.
Finance
1.6 million
New people subject to financial inclusion
measures related to finance
We promote financing for underbanked SMEs and entrepreneurs,
as well as the basic needs of low-income population through
products and services tailored to their needs.
Our microfinance proposition supports inclusive growth and
economic development in Latin America, where the financial
inclusion gap is wide. We have been offering microfinance services
to low-income and underbanked entrepreneurs since 2002. We
help our customers set up small businesses, which drive economic
growth and social mobility.
Through these initiatives, we offer loans to boost the income-
generating capacity of new ventures and help microentrepreneurs
safeguard their business through financing that meets their
working capital needs. A large portion of the customers under
these initiatives are women, who are less likely to access financial
services in developing markets.
In 2024, we continued to:
• evolve our business proposition from microcredit towards
microfinance, by extending our customer value proposition
through solutions that go beyond credit — basic accounts,
financial education, microinsurance and other services.
• make business models more efficient, without jeopardizing the
social impact of our proposition. For instance, we leveraged the
use of technology to open low-cost mobile branches and
improved handling procedures to minimize the time from
microloan application to the funds being available to our
customers.
• combine group and individual credit granting model, adjusting to
our customers’ circumstances and needs, high higher presence of
individual model in Peru and Colombia, and growing — albeit at a
lower rate — in Brazil and Mexico.
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Other finance-based initiatives and services
Supporting customers in financial distress We have debt relief programmes that include payment deferrals and line of credit extensions. |  |  | Supporting customers in financial distress F |  |  |  |  |  |  |
Financing low-income households' basic needs We offer products and services that enable low- income households to access housing and meet other basic financial needs. |  |  | Affordable housing supply G |  |  |  |  |  |  |
|  | Support for low-income households/people with difficulty accessing credit H |  |  |  |  |  |  |

A. In Spain, branches in remote (or sparsely populated) areas to facilitate access to credit and combat social exclusion in communities of less than 10,000 inhabitants. In
Portugal, branches in low-income, small or isolated regions, such as the Azores and Madeira. In Argentina, we have financial inclusion branches and remote agents in the
marginal environment of Buenos Aires and vulnerable communities. In Poland, ATMs (Automated Teller Machines) in municipalities where there is no Santander branch or
partner point of sale. In Uruguay, we have installed three mobile branches since 2020 to reach areas with low levels of banking penetration.
B. Agreements with Correos Cash in Spain, partnerships with retailers such as Oxxo and 7Eleven in Mexico, and agreements with third parties in Uruguay (e.g. Abitab, Red
Pagos).
C. In Poland, we included the Cashless Poland programme to promote the use of payment terminals in localities where the use of digital media is low, and the use of our
associated Partners Outlets points of sale. In Chile we included Mas Lucas.
D. In some countries, we have basic bank accounts that go beyond regulation in order to serve the bottom of the pyramid. For example, the Cuenta LIfe in Chile or the no-fee
account for vulnerable customers in Spain.
E. In several countries we have value propositions aimed at the elderly. For example, tailor-made products for retirees in Mexico and Argentina, services such as Here & Now in
Portugal to help seniors with limited digital skills, and third-party access initiatives in the UK to support seniors who need to be cared for.
F. We have programmes in many countries to help people with debt problems. In Portugal, we have the Iris programme to help customers manage defaults. In the UK, we help
vulnerable customers get out of arrears with self-service tools and direct financial assistance. In Spain, we have financing programmes for vulnerable groups to relieve their
mortgage debts.
G. In Spain, the bank participates in the Social Housing Fund, which facilitates renting for people on low income. It also has affordable rental housing. In the US, as part of its
Communities plan, Santander US provides support for the construction, maintenance and rehabilitation of housing serving low- and moderate-income people.
H. We have initiatives to help groups with difficulties in accessing credit; among them, in Spain, we lend to SMEs at their risk limit; in the US, we lend to small businesses
operating in low- and moderate-income communities; in Argentina, we lend to entrepreneurs with little credit history. In Mexico, we offer special credit programmes to
people at the bottom of the pyramid.
ii. Progress on financial health
In 2024, we continued to make headway with a common approach
to financial health. We define financial health as people’s ability to
manage finances to meet short-term needs and support long-term
goals, bringing stability to avoid financial distress.
We run initiatives in all our markets to promote financial resilience,
planning, security and control among our customers in general
and, especially, the most vulnerable groups.
The solutions that help customers boost their financial health by
making more informed decisions include tools to manage money
better, debt calculators and advisory service, which together with
financial education support our customers' financial health and
better informed decisions.
Financial health must go hand in hand with financial inclusion so
that people who access the financial system can manage their
money responsibly and effectively. We complement this with
financial education to narrow the knowledge gap on financial
products and digital skills.
For more details on our financial education programmes for
customers and non-customers alike, see section 3.2.4 ‘Community
Support’.
In 2024 we have set metrics to monitor financial health, especially
for over-indebted customers.
3.3.3 Privacy, data protection
and cybersecurity
This section outlines how we manage these IRO:

| I- | Potential infringement of customers’, employees’ or shareholders’ rights due to a lack of appropriate technical or organizational measures to protect their personal data according to law and the practices set by the Group. |
| I+ | Education and awareness on cybersecurity issues to understand potential threats and mechanisms to avoid them. |
| R | Potential losses due to fines or a reduction in the number of customers because of a failure to detect or respond effectively to breaches of privacy. |

i. Privacy and data protection
The use of new technologies and progress with the digitalization of
businesses have led to a rapid increase in the processing of
personal data.
Our commitment to complying with regulation on the protection of
personal data throughout their life cycle is key in this regard. Our
corporate standards remain consistent with data protection and
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privacy laws at all times, with an ethical and transparent
management of personal data to enable individuals to exercise
greater control over their data.
We apply measure s to obtain and use only the data that is strictly
necessary to process personal data for legitimate purposes. The
aim of these technical and organizational measures is to preserve
the confidentiality, integrity, availability and resilience of the
systems and services that we use to process data; and thereby to
achieve the correct protection of data subjects’ rights and
freedoms; and to boost individuals’ and broader society’s trust.
We created our compliance programme following the privacy
standards to manage data protection risk correctly. It is based on:
• local subsidiaries’ responsibility to abide by the General Data
Protection Regulation (GDPR) and/or local regulation on data
protection;
• a solid governance model consisting of:
1. corporate and local data protection policies.
2. a data protection officer (DPO) and/or privacy champions in
each unit. We formally disclose appointees to local authorities.
3. a corporate oversight programme based on the monitoring of
management indicators; annual reviews; and an annual
monitoring forum sponsored by the Group Chief Compliance
Officer where our units report on compliance status, key risks
and focal points, and other key data protection matters.
Other measures that strengthen our data protection management
are:
• a common, regular monitoring and reporting model for the units,
including meetings that we document in minutes;
• procedures to manage security-related incidents and the risks
that stem from the potentially unauthorized use of personal
data. We also have specific plans of action, where required,
which the corresponding areas manage;
• cooperation with third-party service providers that must comply
with data protection regulation. All data processors are subject to
a suitability test that we monitor through management
indicators and review regularly;
• reviews on our compliance with data protection laws, which our
Internal audit area performs as part of its annual programme;
• corporate tools that help us manage data protection-related
tasks by bringing together and monitoring control information
through indicators and the annual review programme. For
instance, we regularly update our data processing inventory and
report on indicators and security incidents;
• special training for DPOs and privacy champions as well as
corporate initiatives and the sharing of best practice among
units. In 2024, we ran a refresher course on data privacy by an
external provider and initiatives on the back of it;
• employee training and awareness campaigns on data protection,
which form part of our mandatory annual curriculum and that we
monitor through management indicators; and
• special focus on regulatory developments to update and
consolidate criteria, methodologies and documents.
In May we became aware of an unauthorized access to a Santander
database hosted by a third-party provider. The bank’s operations
and systems were not affected, so customers were able to
continue to transact securely.
Bank put in place protective actions and corrective actions for
clients and employees:
• Affected individuals, where applicable, were notified the incident
and dedicated channels were put in place to provide them with
further information.
• Information was made public by Santander in its corporate
website.
• The bank started an education campaign for clients and
employees regarding the most well-known types of fraud. This
campaign has been reinforced in response to the incident and to
minimize future similar incidents.
• Santander also notified the relevant supervisors and authorities
where the group has a presence, including the data protection
agencies, prudential supervisors, resolution authorities, and in
some jurisdictions law enforcement as required by local
regulations.
• Regarding clients, the Fraud Prevention and Cybersecurity teams
continue to be on alert and analysing any relevant behaviour that
could be associated with cases that take advantage of the
information in question. Also, where relevant and appropriate,
fraud prevention controls have been reinforced, that aim to
mitigate the possible impacts associated with this incident.
Containment was complete and corrective action has been
implemented that will minimize the possibility of any similar
unauthorized access.
ii. Cybersecurity
Cybersecurity provides vital support to our purpose of helping
people and businesses prosper and our aim to provide customers
with first-rate digital services.
We have a board- and subsidiary-board approved cybersecurity
framework that sets out the governance, functions, roles and
responsibilities to manage cybersecurity throughout the Group,
including the role of the Chief Information Security Officer (CISO).
Our cybersecurity policies, which develop the cybersecurity
framework, are based on international standards and subject to
ongoing review in order to maintain and enhance safety levels in
the Group. In 2024 we updated our Cybersecurity requirements
policy for technical and business areas, which includes security
provisions for the different domains.
To assess how we’re doing on cybersecurity within the industry, we
monitor our security rating provided by an independent third party.
Bitsight Company gives us with a score between 250 and 900 (with
740-900 considered “Advanced”) based on public information and
externally visible network traffic and systems. In 2024, we scored
790 points, which put us in the upper quartile among our peers and
meant that we hit our target.
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Protecting our customers’ and employees’ information is the
responsibility of every Santander employee. We outline this in
another policy under our cybersecurity framework: Cybersecurity
standards for the protection of Santander, which sets out the
principles that we must follow. En 2024, we ran these
cybersecurity awareness initiatives for our teams:
• Regular ethical phishing exercises to strengthen employees’ and
partners’ resilience to cyber threats.
• Promote a culture of reporting suspicious incidents or messages
through all available channels.
• Update to our mandatory cybersecurity training for employees,
including security recommendations against malicious attacks by
email, text message or phone call, deepfake, phishing, social
engineering, and other threats.
• Specialized training for high-risk groups such as payment agents,
IT professionals and developers, digital asset owners, board
members, and executives and their support teams.
• Specialized fraud training for contact centre agents and branch
employees.
• Internal awareness campaigns for all Group employees to keep
them up to date with the latest cybersecurity and fraud trends.
To boost the protection of our customers online, we ran several
initiatives that we assess by measuring their impact. In 2024, these
campaigns reached 58% engagement (far exceeding the 10%
market benchmark):
• Cyber Heroes, an interactive campaign where our customers test
their knowledge of online security and fraud prevention in
realistic scenarios. It's available in Argentina, Brazil, Chile,
Mexico, Portugal, Spain, Poland, and the UK.
• Awareness workshops for retail and corporate customers at our
branches to explain online threats and how they can reduce
them.
• Por una vida online y corriente ('Everyday Cyber'), a global
cybersecurity awareness campaign to help our customers adopt
better online security and fraud detection habits.
• Corporate sponsorships, such as Ferrari and League of Legends
(an online strategy game), which help us engage more audiences
using their unique tones and language. These campaigns follow
a multi-channel strategy to reach a global impact.
• In other Santander markets, our “Obvious Passwords” cyber
campaign in Uruguay received local recognition for its work in
raising awareness on such a hot topic as online security for
customers.
• Titania, remains one of Santander’s key initiatives to raise
awareness and promote learning about cybersecurity in the form
of a fiction podcast. With over two million plays, it received the
prizes for Best Podcast and Best Branded Content at the Ondas
Awards in Spain.
We run these campaigns through the Group’s numerous digital
channels. What’s more, users can report suspicious messages by
writing to reportphishing@gruposantander.com.
In 2024, we continued to promote collaboration on cybersecurity
and online fraud prevention with public and private organizations:
• Santander plays a key role in the Financial Services Information
Sharing and Analysis Center (FS-ISAC) for the exchange of
information in Europe and is the European board’s current chair.
This organization, established in The Hague, has more than
1,000 members from 174 entities, including major banks, Swift
and Europol.
• Santander is part of the leadership team of the US Ransomware
Task Force, whose objective is to improve prevention and
response capabilities against ransomware attacks.
• Santander contributes to the World Economic Forum's (WEF)
initiatives to fight cybercrime. This includes the Cybercrime Atlas,
which aims to disrupt cyber crime networks. We also participate
in several working groups to promote cybersecurity talent
through public-private partnerships; develop a cybersecurity
resilience plan; and contribute to narrowing the cybersecurity
skills and knowledge gap.
• We work on key cybersecurity and fraud prevention initiatives
with other entities and organizations such as the Institute of
International Finance (IIF), the European Financial Services Round
Table (EFR), the European Banking Federation, DigitalEurope,
and others.

| For more details on our cybersecurity plan and the initiatives undertaken during the year, see section 5. 'Research, development and innovation (R&D&I)' in the 'Economic and financial review' chapter; and section '5.2 Operational risk management' in the 'Risk, compliance & conduct management' chapter.

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4. BUSINESS CONDUCT
(Governance information)
4.1 Corporate culture
Santander Way
We are a global company, guided by a common culture, The
Santander Way. It is aligned with our corporate strategy and it is
the basis of our success. Our values (Simple, Personal and Fair), our
corporate behaviours (TEAMS), our leadership principles and our
robust risk culture (Risk Pro) guide us every day:
• We continued to promote our behaviours and leadership
principles in the Group’s talent processes, as well as promoting
them among our leaders for them to be an example of our
culture.
• We have intensified our efforts to give our employees the
necessary tools and resources to improve their competencies and
employability, aligning us with the most critic business and
market demands.
• This year we evolved Dojo, our digital learning platform, that
offers a personalized offer based on current and future roles,
promoting a culture of self-development and continuous
learning.
• We continued to assess how to improve our efforts through our
employee listening programme - YourVoice, and we have
developed action planes to keep making a better place to work.
• We continued to promote our culture through our performance
review, MyContribution, where 50% is based on 'what' we do,
40% on 'how' we do it and 10% on our risk management.
• All the above is sustained by our Global Culture Policy, which sets
the foundations, guidelines and standards to foster a coherent
culture across Banco Santander.

| Our values Simple Personal Fair |
| Our behaviours |
| Our leadership principles → Promote a 'Group First ' mindset → Lead transformation → Build, develop and grow talent → Display TEAMS flawlessly → Drive inclusive culture |
| Our strong risk management culture |

72 The Conflicts of Interest Policy has been updated to align it with the General Code of Conduct (updated in 2024) and to simplify it. In addition, the Procurement Management
Conduct Policy has been integrated into this policy.
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4.2 Ethical conduct
In this section we cover how Santander manages the following
IRO:

| I+ | Act responsibly and consider investors’ interests and the impact on employees, broader society and the environment; pay taxes to support the distribution of wealth. |
| I- | Harm broader society through bribery or corruption. |
| R | Risk stemming from improper conduct that makes illicit funds or assets appear legitimate and, therefore, facilitates illegal activity or to benefit from it. |

4.2.1 Conduct standards
Our General code of conduct (GCC) sets out the behaviours and
values that all Grupo Santander employees must abide by when
engaging with colleagues, customers, vendors and broader society.
It helps promote a solid risk management and compliance culture
and acts as a mechanism to prevent the risks we are exposed to.
The GCC promotes equal opportunity, non-discrimination, zero
tolerance for sexual or work-related harassment, respect for
others, work-life balance, human rights, and environmental
protection.
The Grupo Santander board of directors approves the GCC, which
all Group employees — general workforce, top management and
members of the management bodies of the subsidiaries that make
up Grupo Santander — must be aware of and comply with.
Available on our corporate website for all stakeholders to read, it is
in force in every Group subsidiary.
It includes a message from our Executive Chair on the importance
of having a solid and common corporate culture that all Santander
employees are on board with. Subsidiaries’ versions also have a
message from their local CEO.
The GCC’s core implementation mechanisms are:
i. Mandatory training for employees on the GCC through an
annual course that instils the guidelines they must follow in
their day-to-day to prevent possible risks, such as the Group’s
penal responsibility; how to handle conflicts of interest
according to our policy, 72 and what to do if they receive gifts and
invitations from people outside Grupo Santander.
We supplement GCC training with a statement that reinforces
our employees’ pledge to comply with it.
ii. #YourConductMatters: Campaigns via email, Intranet and other
media to boost employees’ awareness of the GCC, as well as of
Canal Abierto and the latest whistleblower protection laws.
iii. The Compliance area, which deals with employees’ queries on
the enforcement of the GCC.
iv. Canal Abierto, our whistleblowing channel where employees
and stakeholders can report violations of the GCC and of our
corporate behaviours.
v. Breaches to the GCC are managed and sanctioned in accordance
with applicable regulations.
Our risk appetite metrics include monitoring of employees’
completion of mandatory training on the GCC. Every quarter, we
gather completion data for every unit, which currently stands a t
99,1% at December 2024. Thus, there is no requirement to put
remediation plans in place.
Moreover, mandatory training forms part of our employees’ annual
performance review, which acts as an incentive to complete it in
due time.
We also use another management metric to identify how many
incidents reported to the Group’s ethical channels are linked to
violations of the GCC.

| For more details, see section 7.2 ‘Compliance and conduct risk management’ in the ‘Risk management and compliance’ chapter.

4.2.2 Responsible taxation
The Group’s tax strategy is consistent with our business strategy.
Our principles of action in tax matters, which apply to all our
entities, must align with our purpose of helping people and
businesses prosper and with our aim to be the best open financial
services platform by acting responsibly and earning the lasting
loyalty of our employees, customers, shareholders and
communities. The board of directors approves our tax strategy and
revises it regularly.
The Group’s tax risk management and control, which draws on our
internal control model, sets out the actions to follow our tax
strategy and the principles that underpin it.
We participate in cooperative compliance initiatives led by tax
authorities. Since 2010, we've adhered to the Spanish Code of
Good Tax Practices and the UK Code of Practice on Taxation for
Banks, and more recently, in 2022, to the Portuguese Code of Good
Tax Practices. Since 2015, we've voluntarily submitted an annual
Tax Transparency Report to Spain's Tax Authority.
The principles of Grupo Santander’s tax strategy must enable us to
make appropriate contributions according to the value creation in
each of the jurisdictions where we operate, as well as to comply
with local laws.
Core principles of Santander’s tax strategy

• Satisfy our tax obligations based on a reasonable interpretation
of tax laws, grounded on their spirit and intention.
• Respect the rules on transfer pricing and pay taxes in each
jurisdiction according to our operations, assumed risks and
profits.
• Not give tax advice or planning strategies when marketing and
selling financial products and services. Not engage in
73 People in special situations (non-exhaustive list): individuals living in extremely rural areas, those residing in care facilities or pensioners, people unable to manage their
financial affairs, gender expression, students and young people, individuals living in shelters or refuges, prisoners and those on parole, international students, economic
migrants, refugees, and isolated individuals.
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transactions or activities that enable our customers to avoid
paying taxes.
• Communicate Santander's total tax contribution clearly,
distinguishing between taxes borne by the Group and by third
parties for each jurisdiction.
• Not create, or acquire a stake in, entities registered in countries
or territories considered 'non-cooperative jurisdictions' without
board approval; and properly monitor the Group's operations in
such territories.

| For more details on the Group’s tax strategy, visit our corporate website santander.com.

The Group’s tax contribution and the relevant role that our
subsidiaries play in the effective application of their respective
jurisdiction's tax systems are a key component of the sustainable
and responsible banking framework we pledge to follow and our
contribution to sustainable and inclusive growth.
In 2024, the Group paid EUR 22.5 billion in taxes, of which EUR
10.9 billion account for taxes we paid directly to the tax authorities
(57.5% of income before taxes) and the rest for collected taxes
originating from our business operations with third parties.
The taxes the Group paid directly are part of the cash flow
statement and mainly correspond to the income tax paid in 2024
(EUR 5.9 billion at an effective rate of 30.9%).
There is usually a mismatch in the taxes we pay directly and those
recorded in the financial statements because the payment date set
by the laws of each country is often different to the accrual date of
the income or the transactions subject to tax. Income tax expense
recorded for the year amounts to EUR 5.3 billion, which means an
effective rate of 27.8% (see Note 27 to the consolidated report).

| For more details on the Group's tax contribution, see section SN 7.7 'Tax contribution'.

4.2.3 Financial crime compliance (FCC)
Grupo Santander is firmly committed to the fight against financial
crime and compliance with financial crime prevention regulation in
every market where we operate.
Our Group board-approved and subsidiary-ratified Corporate
financial crime compliance (FCC) framework sets out the key
principles for preventing financial crime, which underpin these
programmes: the anti-money laundering and terrorism financing
prevention programme (AML/CFT); the sanctions programme; and,
since 2023, the anti-bribery and anti-corruption programme (ABC).
This framework is available to all employees and interested third
parties. Moreover, we use information channels to raise awareness
of the importance of financial crime compliance. We reach out to
all our stakeholders through annual training programmes,
communications channels (corporate and subsidiary Intranet sites),
awareness campaigns, internal newsletters and best practices so
that they can learn about and understand their responsibilities
across the Group’s entire operations.
The policies that build on this framework (including customer due
diligence — CDD — procedures) are designed according to
domestic and international financial crime regulation to manage
and mitigate the impacts and risks related to FCC and protect the
Group’s integrity in all our businesses and operations. We
constantly review and update our policies to remain consistent
with regulatory amendments and new and ever-changing external
threats.
Moreover, we have a common oversight methodology that enables
us to verify that all our operations comply with this framework
under the most demanding, standardized criteria that the
centralized and technical FCC units in our markets endorse. These
units also play a crucial role in promoting FCC culture and
awareness to all Grupo Santander employees.
The central and subsidiary-based Financial Crime Prevention units
engage in constant dialogue with all the Group’s businesses and
functions to identify new risk types, overcome emerging
challenges to prevent those risks, and implement risk
management, control and mitigation best practice. Some of the
salient responsible banking topics to highlight are:

| For more details on our provisions, see Note 25 of this report.

People in special situations
Our FCC onboarding supports the Group’s ambition to help people
in special situations 73 get access to financial services and requires
business units to mitigate the potential financial crime risk related
to these groups, based on objective criteria and compliance with
FCC regulation.
Our mandatory FCC procedures (identification, risk segmentation
and due diligence) for people in special situations to access to
banking services and the document updates we perform under our
FCC framework are free of bias and subject to strict compliance
with the law. Moreover, the Group has been and will continue to
run remote and in-person onboarding that gives equal access and
opportunity that best adapt to each customers’ circumstances.
People trafficking and exploitation environmental
crime
Our customer risk assessment considers the risks stemming from
the sectors that our customers operate in. To categorize a sector,
we consider exposure to corrupt practices, people trafficking,
modern slavery, labour exploitation, child abuse and
environmental crime. We subject these sectors to further know-
your-customer (KYC) due diligence to be absolutely sure of their
level of exposure or link to those types of practices. We also have
transaction control systems that enable us to detect irregular
movements that may come from or be related to such practices.
74 Reference is made in this Sustainability statement to judicial and administrative proceedings that have finalised during 2024 with a firm conviction, sanction or fine against an
entity of the Group, which are relevant to the Group due to their materiality.
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Grupo Santander plays an active role in public-private sector
initiatives and specialist forums where we provide financial crime
prevention knowledge, expertise and analysis. As a global bank
that offers a wide range of financial products and services, we have
a deep understanding of the risks related to our sector. We are
firmly committed to the integrity of the financial system and the
development of effective solutions to boost cooperation between
the public and private sectors in tackling complex and global
challenges.
Bribery and corruption
In 2024, we continued to implement our ABC programme, which is
also subject to constant review and update in line with the rest of
our policies.
We conduct a risk and control self-assessment (RCSA) in all our
subsidiaries and units to identify residual risk within the
organization.
It involves assessing the inherent risks of our business activities in
terms of financial crime, with money laundering and terrorism
financing key factors and bribery and corruption also factors that
we consider. Marketing, Sponsorships, Vendor Management and
Human Resources are the areas with the highest exposure to the
ABC risk taxonomy. In 2024, we continued to enhance our
awareness strategy, which is based on the programmes included
under our corporate framework, by combining basic training with
customized programmes. Throughout the year, we ran technical
sessions, FCC risk awareness workshops, courses on ABC risks for
procurement staff, and specialized training for board members.
Thus the Group’s annual programmes cover FCC risks sufficiently.
Our training plans, which we supplement with compliance
programmes, help raise awareness among all the Group’s
employees.
As one of our KPI, the number of employees we train in the Group
highlights our firm commitment to mitigating bribery, corruption
and other FCC risks. This cover all risks functions takers. In
particular:
◦ 166,199 employees trained in FCC.
In 2024, we continued to bolster our assessment and mitigation
of the risks related to outsourcing and supplier relations in order
to automate the controls stemming from the ABC programme.
To support this initiative, Group employees received specialized
training on ABC and our code of conduct. This is a step forward
that bolsters Santander’s operational resilience and regulatory
compliance significantly.

| For more detailed information on this issue, see section 4.4 'Our suppliers'.

Detecting and managing FCC incidents
Per FCC laws, the financial intelligence units in all our markets
have a robust system to detect, investigate, respond to and inform
the authorities of suspicious transactions in terms of FCC (including
those with indications of bribery or corruption). This system
includes internal controls, lines of action and independent
investigation committees that operate outside of the chain of
command to preserve impartial incident management. The
findings of these investigations are reported regularly to the
Group’s management and oversight bodies.
Highlights of key activities r elated to detection and cooperation
with authorities activities in 2024 include:

231,810 |  | 453,175
disclosures to authorities |  | investigations conducted

Moreover, our whistleblowing channel, which we manage
according to the Group General code of conduct and Canal Abierto
policy, is where individuals can report violations of laws and
internal compliance regulations related to the fight against
financial crime (FCC).
In accordance with the established criteria 74, the Group has no
record of any judicial or administrative proceedings in relation to
corruption and anti-bribery, nor in relation to anti-money
laundering and terrorism financing.

| For more detailed information on this issue, see section 4.2.1 'Conduct standards'.

| For more detailed information on this issue, see section 4.3.1 'Canal Abierto'.

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4.3 Ethical channels
In this section we cover how Santander manages these IRO:

| I+ | Protect the confidentiality of users of the bank’s ethical channel and have an effective reporting system in place that follows robust principles and procedures. |
| I- | Negative impact on the environment or broader society by failing to implement measures to resolve incidents through complaints or reporting channels or due to a lack of continuous improvement actions. |

4.3.1 Canal Abierto
Canal Abierto is an anonymous and confidential Grupo Santander
channel to report unethical conduct. It protects whistleblowers by
expressly prohibiting reprisals or any negative consequence
against them. Every unit in the Group administers its own ethical
channel in different languages (including the local tongue)
according to the common standards set out in the Canal Abierto
policy since 2020.
Minimum standards applicable to all channels include subsidiary
CEO endorsement; communication to employees of the importance
of using the channel; information on how incidents have been
handled and lessons learned; easy access to the channel and
anonymity (if desired); external platforms to receive reports
according to best practice; mechanisms to manage conflicts of
interest in internal investigations of reports; and regular internal
audits.
The board of directors approved the Canal Abierto policy and the
related usage and operation procedure, and brought the Banco
Santander channel under the Chief Compliance Officer's direct
remit. These policies and procedures are available to Group
employees and stakeholders on our corporate website and the
Canal Abierto platform.
Canal Abierto is available to employees on Santander Now
(Intranet) and to any Banco Santander stakeholder through our
corporate website and the Canal Abierto platform.
Canal Abierto is mainly set up to receive reports from employees;
however, some subsidiaries’ local channels are open to vendors,
customers and other stakeholders, who can report violations of the
GCC. Business incidents or complaints outside of Canal Abierto’s
scope are not accepted on these channels.
On Canal Abierto, whistleblowers can report their suspicions about
professional conduct related to:
→ unlawful acts at the workplace;
→ irregularities or breaches of the General code of conduct and its
implementing regulation that may be subject to disciplinary
action;
→ improper accounting or auditing practices, internal control or
influence on external auditors (SOX);
→ violations of anti-money laundering and terrorism financing
laws or of our internal regulations to comply with those laws, as
well as acts of corruption and bribery;
→ violations of securities market laws;
→ conduct that may involve an act that infringes the law or any
other regulation and, in particular, a serious or very serious
criminal or administrative offence or infringement of European
Union law; and
→ acts or conduct that go against the Group’s corporate
behaviours.
Santander pledges to handle reports received through Canal
Abierto in a diligent, independent and objective manner for the
benefit of the parties involved. This is a protective measure for the
people who communicate in good faith through the channel, as
well as for anyone else who takes part of the related internal
investigations. The following criteria, which we set out in the
Group’s Canal Abierto policy, reflect that pledge:
→ Appropriate handling of the reports received, notwithstanding
their possible rejection should they fall under any of the cases
provided for in internal regulations or if it is considered that
there are no grounds for a case.
→ 60-day processing time, which could be extended by up to 30
days for cases that are considered especially complex.
→ Conflict of interest management during the investigation of
cases, in which anyone who may have a conflict of interest with
the persons involved in the matter will refrain from taking part.
The usage and operation procedure details the teams tasked
with investigating each case in relation to the type of report.
→ The prohibition of reprisals against employees or other
stakeholders who report, in good faith, breaches of internal or
external regulations or conduct that does not align with our
corporate behaviours, for having merely accessed an ethical
channel.
Every year, our employees undertake a mandatory training course
on the General code of conduct that includes a module on the
importance of using Canal Abierto.
Moreover, we raise awareness of Canal Abierto and it assurances
among our employees through email and other channels that
detail statistics on the handling of the reports received, the
channel’s features, when to use it, and other information.
On an annual basis, the compliance function prepares a joint report
for the risk supervision, regulation and compliance committee and
the audit committee, informing their members about the activity of
the Group’s channels, key statistics, and other matters related to
Canal Abierto.
The Compliance area aims to enhance how we manage and
analyse the Group’s ethical channels in order to keep our governing
bodies informed of the risks that we may spot, the key concerns of
employees and stakeholders, and the action plans we put in place
to reinforce our ethical and compliance culture.
75 More detail see previous footnote.
76 Applicable in accordance with local regulations.
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We collect data on the Group’s ethical channels every quarter in
relation to the number and type of reports received, and the
measures taken.
An external auditor reviews those data regularly to ensure their
traceability and integrity.
In 2024, 4,437 reports were received, including 216 reports from
third parties (163 from customers and 53 from vendors).

| 2024
Reports received A | 4,437
reports received over total headcount | 2.1%
Categories of received reports |
Breaches to the GCC | 2,286
Marketing of products and services | 321
Relative to privacy/security and confidentiality of information | 116
Internal fraud | 292
Harassment B | 1,094
Equal opportunities and non-discrimination | 132
Conflicts of interest/activities outside the Group | 219
Other breaches to the GCC C | 112
Cases of Human Resources D | 1,754
Other typologies E | 397
Closed reports | 4,122
Disciplinary actions | 715
which led to dismissals | 393
Dismissals over total headcount | 0.2%

A. Scope includes companies in: Argentina, Brazil, Chile, Spain, Mexico, Poland,
Portugal, United Kingdom, United States, Uruguay, Colombia, Peru, Switzerland,
Bahamas, and Digital Consumer Bank subsidiaries and SCIB branches. In 2023,
reports received were 3,611. The increase in the number of cases received is due to
the fact that in 2024 a wider perimeter of business units was taken into account,
including banking and non-banking units.
B. Harassment (according to CSRD regulation) is defined as a situation where an
unwanted conduct related to a protected ground of discrimination (for example,
gender under Directive 2006/54/EC of the European Parliament and of the
Council (15), or workplace harassment among others) occurs with the purpose or
effect of violating the dignity of a person, and of creating an intimidating, hostile,
degrading, humiliating or offensive environment. Over the total communications
received in this category, 89% were of workplace harassment.
C. It includes reports relative to Anti-money laundering and terrorist financing and
sanctions; cybersecurity, gifts and invitations, corruption and bribery, market
abuse and antitrust. The Group receive d 14 reports in 2024 regarding corruption,
which led to 3 dismissals.
D. It includes reports relative to breach of corporate behaviours, labour regulations
and serious acts of disrespect.
E. It includes reports relative to external fraud, accounting and auditing and any
other breach of the Group’s legal or internal regulations, policies or procedures in
relation to functional or organizational aspects not mentioned in the categories
above.
In accordance with the established criteria 75, the Group:
• has no record of any judicial proceedings in relation to incidents
of discrimination or violation of fundamental rights.
• has no record of cases involving employees that refer to serious
human rights incidents.
4.4 Our suppliers
In this section we cover how Santander manages these IRO:

| I+ | Promote responsible practices among vendors; engage with them, assess their ESG performance and give them recommendations and tools to improve. |
| R | Potential risk from failing to ensure the operational resilience of the value chain by assessing vendors’ solvency, reputation and compliance with the law. |

4.4.1 Acting responsibly towards suppliers
Our outsourcing and third-party management model and third-
party certification policy (which apply in all our markets) provide a
methodology so that our suppliers meet the Group’s minimum
requirements to avoid risks that stem from substandard
operational resilience, solvency, reputational control and
regulatory compliance.
Moreover, to promote responsible practices in our supply chain, we
have a supplier ESG certification methodology 76 that supplements
the third-party certification policy with the aim of identifying the
suppliers that pose the greatest risk in terms of sustainability. This
methodology also helps us determine which controls to adopt
according to the risk identified.
As a driver of the Global Compact training programme, we’re
supporting our suppliers in their transition through courses to
boost knowledge on sustainability and the resources needed to
implement it.
Sustainability in procurement
In 2024, we began embedding the new ESG approval methodology
in the Group, that enables us to:
77 Based on S&P’s ESG Risk Atlas.
78 New metric not comparable to 2023 information. Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal, Peru, Spain, United
Kingdom and Uruguay, and other geographies in which Digital Consumer Bank operates such as Italy.
79 Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal, Poland, Peru, Spain, United Kingdom, United States and Uruguay, and other
geographies in which Digital Consumer Bank operates such as Italy and Nordics.
80 Reference is made in this Sustainability statement to judicial and administrative proceedings related to non-payment to suppliers which are ongoing during 2024 and are
relevant to the Group due to their materiality.
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• Pre-classify all our suppliers according to their sector's
environmental and social exposure 77.
• Give our suppliers a final ESG risk classification as low, medium
or high, through adjusting the pre-classification with a survey
considering other factors as country risk, number of employees,
and company-specific environmental traits.
As at 2024 year end, we had assessed 487 suppliers 78 identified
with ESG risk. We plan to continue embedding this methodology
and complete assessments by giving all our suppliers a final risk
classification over the next two years.
This assessment includes such ESG aspects as carbon footprint
calculation, inclusion in terms of gender and people with
disabilities, flexi-working, minimum wage and good governance
practices, codes of conduct and anti-corruption policies, human and
labour rights recognition, and other elements set out in
international standards such as the United Nations Global
Compact.
We supplement our supplier assessments with remediation plans,
where necessary, base d on our findings. This helps our suppliers in
their transformation and compliance with domestic, European and
international ESG regulatory frameworks.
Sustainability in supplier negotiations
Negotiations to procure certain products and services such as
cards, electricity and corporate vehicles include mandatory and
specific sustainability requirements that we embed in purchasing
specifications.
Moreover, we request ESG information in the tenders of other
products and services that also have a vast environmental and
social impact, such as purchases of ATMs (Automated Teller
Machines) and hardware, and the transportation of cash. This
information, which in 2024 we considered for illustrative purposes,
includes the product's or service's carbon footprint, the use of
recycled or renewable materials, energy efficiency, accessibility for
people with disabilities, and compliance with social, labour and
environmental laws in the supply chain.
Other key aspects
→ The Group has a corporate tool to enhance and standardize the
certification of higher risk suppliers in all our core markets as well
as to review key risks such as cybersecurity, business continuity,
physical security, facilities and data protection, anti-bribery and
corruption, data integrity and other additional risks.
→ We continue to build up expert teams in our markets to consider
ESG standards in negotiations and risks assessments under the
new methodology.
→ We’re working to extend our ethical channels for suppliers to the
rest of our core markets.
4.4.2 Supplier payments practices
→ EUR 11.6 billion paid to suppliers. 89% are local and account for
88% 79 of total procurement volume.
The Group fully complies with the maximum payment terms
prescribed by law. Our average is 15 days (we paid 81% of invoices
within the maximum period). We have a cost model that oversees
payments to third parties, and is expected to be complemented
with specific controls for SMEs. There are no significant differences
found in payment terms to suppliers. Likewise, the Group has no
record of any judicial or administrative proceedings related to non-
payment to suppliers. 80
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SUSTAINABILITY NOTES
SN 1. Introduction, basis of presentation of the Sustainability statement
and other information
a) Introduction
This report is the 'Consolidated non-financial information
statement and sustainability information' of Banco Santander, S.A.
and its subsidiaries”. It provides detailed information in accordance
with Directive (EU) 2022/2464 on corporate information on
sustainability and Commission Delegated Regulation (EU)
2023/2772. It also includes the information necessary to comply in
accordance with Art.49, sections 5, 6, 7, 8 and 9 of the Spanish
Commercial Code as amended by Act 11/2018, which transposes
into Spanish law Directive 2014/95/EU of the European Parliament
and of the Council of 22 October 2014 amending Directive
2013/34/EU as regards disclosure of non-financial and diversity
information. The Sustainability statement forms part of the
consolidated directors’ report of Santander Group and the board of
directors approved it on 25 February 2024.
b) Scope of information
The scope of this document covers the core activities of the Group
and its subsidiaries from 1 January to 31 December 2024 and is
prepared following the same consolidated basis (principles,
accounting policies and criteria) as the financial statements and
with the criteria differences set out in this table:

Topics |  | Scope of information
Climate, our transition plan (Environmental information)
Supporting our customers in the green transition
Green finance |  | Corporate & Investment Banking.
Financing of electric vehicles |  | Digital Consumer Bank auto loan portfolio.
Purchase of cards made of sustainable materials |  | Main companies of the Group in: Argentina, Brazil, Chile, México, Poland, Portugal, Spain, United Kingdom and Uruguay.
Embedding ESG in risk management
Portfolio exposure to climatic sectors |  | Full Group scope
Equator Principles |  | Corporate & Investment Banking.
Aiming to align our activity with the Paris Agreement Goals
Climate alignment |  | Corporate & Investment Banking for thermal coal, power generation, oil & gas, aviation, steel and auto manufacturing portfolios. Digital Consumer Bank for the auto loan portfolio. Commercial banking perimeter of Brazil for the agro portfolio. And perimeter of commercial banking in Spain and the United Kingdom for the portfolio of residential mortgages and real estate.
Environmental footprint |  | Full Group scope. Except for the calculation of Scope 3 emissions (categories 1, 2, 4 and 9) for which the information of main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal, Poland, Peru, Spain, United Kingdom, United States and Uruguay, and other geographies in which Digital Consumer Bank operates such as Italy.
EU Taxonomy
Green Asset Ratio (GAR) |  | Scope based on the prudential consolidated group, in accordance with the Commission Delegated Regulation (EU) 2021/2178.
Supporting employees, communities and customers (social information)
Acting responsibly towards our employees
Headcount |  | Full Group scope (except for accident data where Santander Polska S.A. is not included)
Remuneration |  | Full Group scope

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Training |  | Full Group scope
Employee engagement survey |  | Full Group scope
Communities sustainable development
SRI AuMs |  | Wealth Management & Insurance: SAM and Private Banking
Support for higher education, employability and entrepreneurship |  | Main companies of the Group in: Argentina, Brazil, Chile, Germany, Mexico, Poland, Portugal, Spain, United Kingdom, United States, United Kingdom and Uruguay, in addition to Fundación Universia.
Other community support programmes |  | Main Group companies in: Germany, Argentina, Brazil, Colombia, Chile, Spain, United States, Mexico, Perú, Poland, Portugal, United Kingdom, Uruguay, and the rest of the countries in which Digital Consumer Bank operates, as well as Foundations associated to the Group (e.g. Fund. Banco Santander in Spain, Santander Foundation in the United Kingdom, etc.).
Acting responsibly towards customers
Customers, offices and channels |  | Full Group scope
NPS (customer satisfaction) |  | Main Group companies in: Argentina, Brazil, Chile, Spain, United States, Mexico, Poland, Portugal, United Kingdom and Uruguay.
Customer complaints |  | All Group entities (>1% of reported claims volume in 2024).
Financial health and inclusion |  | Main companies of the Group in: Argentina, Brazil, Colombia, Chile, Chile, Germany, Mexico, Peru, Poland, Portugal, Spain, United Kingdom, United States and Uruguay.
Business conduct (governance information)
Corporate governance
Corporate governance |  | Banco Santander, S.A.
Communications with shareholders and investors |  | Banco Santander, S.A.
Ethical conduct
Mandatory training on the GCC |  | Full Group scope
Tax contribution |  | Full Group scope
Financial crime compliance |  | Main Group companies with FCC obliged parties within the perimeter of GFCC (Group Financial Crime Compliance).
Litigation and penalties |  | Full Group scope
Ethical channels
Ethical channel |  | Group companies in: Argentina, Brazil, Chile, Spain, Mexico, Poland, Portugal, United Kingdom, United States, Uruguay, Colombia, Peru, Switzerland, Bahamas, and CIB and Digital Consumer Bank subsidiaries and branches.
Acting responsibly towards suppliers
Payments to suppliers |  | Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal, Poland, Peru, Spain, United Kingdom, United States and Uruguay, and other geographies in which Digital Consumer Bank operates such as Italy and Nordics.
Evaluated suppliers identified with ESG risk |  | Main companies of the Group in: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Portugal, Peru, Spain, United Kingdom and Uruguay, and other geographies in which Digital Consumer Bank operates such as Italy.

Significant changes in criteria with respect to the 2023
Sustainability Report are reflected in the corresponding section of
this chapter, and generally in section h) of this note.
For a list of subsidiaries included in the consolidation that are
exempt from individual or consolidated sustainability reporting
pursuant to article 19a or 29a(8) of Directive 2013/34/EU, see
Annex 1. Subsidiaries of Banco Santander, S.A. in the ‘Audit report
and consolidated annual accounts'. Of this list, the following
companies are required to report sustainability information under
CSRD:
• Santander Consumer Bank AS (in Norway)
• Santander Bank Polska S.A. (in Poland)
• Stellantis Banque France (in France)
Other companies that meet the requirements established by the
standard but are located in countries where the directive has not
been transposed are not considered obliged to report under the
CSRD.
Moreover, the Group has not applied the exemption in relation to
the breakdown of information on upcoming events or matters
under negotiation.
From 1 January 2025 to the date on which we prepared this
Consolidated non-Financial Information Statement, there were no
additional events that could have a significant impact on the
information set out in this report other than those described in the
consolidated annual accounts.
For more details, see Notes 1, 2 , 3 and 53 to the consolidated
report and sections 3 and 4 of the ‘Economic and financial review’
chapter.
81 Resources that develop and/or help create products and enable us to operate as a bank (e.g. employees; capital; buildings, offices and other physical infrastructure;
technology; and others).
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c) Value chain
Banco Santander has a defined value chain that identifies all the
actors involved in it. It considers the entire consolidation scope set
out in the bank’s Annual Report. This chart illustrates our value
chain. It is split into three main groups (upstream, own operations
and downstream) and shows the actors in each one :
To define t he value chain, the Group considered the indications of
Regulation 2022/2464 (paragraph 33); Delegated Regulation
2023/2772 (ESRS 1); and the EFRAG (European financial reporting
advisory group) Value Chain Implementation Guidance.
These are the definitions we used:
Upstream: Set of activities or p rocesses carried out by companies
that are part of the bank’s upstream phases and that provide the
inputs 81 that we use for the development and marketing of
products and services. This includes companies with which the
bank has a direct and indirect commercial relationship.
• Financial institution s: Monetary institution and public entity
responsible for setting monetary policy that will impact on
Banco Santander; regulating currency circulation; supervising
the interbank market in which the bank operates; and providing
liquidity, where required, for solvency purposes. For instance,
the European Central Bank, Banco de España, Bundesbank,
Narodowy Bank Polski, etc.
• Product and service providers: Companies that provide
products and services that are subsequently marketed in later
phases of the bank’s value chain or that the bank uses to carry
out its operations. For instance, insurance companies (e.g.
suppliers of products that are marketed in the bank’s
downstream phase), technology providers, external audit and
consulting service providers, materials suppliers and office
landlords.
The Group continuously oversees the correct management and
maintenance of its supplies to offer a high value added service to
customers and to guarantee business continuity.
Own operations: Activities that the bank’s functional areas and
employees carry out in our markets and subsidiaries.
• Assets: Assets and properties that the bank owns. For instance,
tangible assets such as offices.
• Geographies: Places where the bank and its subsidiaries carry
out their operations. For instance, Brazil, Spain, United States,
the United Kingdom, and Mexico.
• Cross-cutting areas/functions: Departments and areas within
the bank whose function is to manage and develop the bank’s
operations. For instance, Compliance, Risk, Strategy, Human
Resources, Procurement.
Downstream: Commercial relationships and the products and
services that the bank sells to meet the needs of its customers and
end users.
• Retail and Commercial Banking : A segment that focuses on
meeting financial needs and offering a variety of products and
services that are accessible and tailored to specific customer
requirements. It covers all retail (individual) and commercial
(SMEs, large corporates and institutions, excluding those in
CIB) banking operations. For instance, savings accounts,
mortgages, credit cards and financial services for SMEs.
• Digital Consumer Bank: A segment that aims to convert single
product customers into complete banking customers through
other products. This business brings together Openbank
(online banking platform) and Santander Consumer Finance.
For instance, auto loans, consumer loans and credit cards.
• Corporate & Investment Banking (CIB): A segment that
provides a wide range of financial services to businesses,
82 See sections 2.4.5 Our Environmental footprint, 3.1.1 Talent and Skills Development and 3.2.4 Community Support for this chapter; and notes 46 and 47 of the Annual
Accounts.
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institutions and governments. It includes global corporate
banking, investment banking and markets worldwide, as well
as globally managed treasuries and equities businesses. For
instance, advice on mergers and acquisitions (M&A), corporate
finance, investment banking, asset management and risk
management.
• Wealth Management & Insurance (Wealth): A segment that
provides specialized financial services to high net worth clients
and those seeking to protect their assets through insurance. It
comprises Santander Asset Management, Santander Private
Banking, and Santander Insurance.
• Payments: A segment that provides digital payments and
global technology solutions for the bank and new customers in
the open market. It is structured into two businesses: PagoNxt
and Cards (e.g. the cards platform).
• Joint ventures, associates and other investments: Entities that
are not globally integrated in the annual accounts but in which
the Group has decision-making capacity over their operating
activities that have not been previously considered in the value
chain.
• Retailers: Sales channels for companies in the final phases of
the value chain that, through their own commercial network,
are responsible for selling the bank’s products and services to
their customers. For instance, car dealerships.
d) Information not disclosed
In response to the request set out below, the Group has disclosed
partial information. It is not possible to make further disclosure
because it is confidential and sensitive information on the Group's
strategy
• ESRS 2. Minimum Disclosure Requirement - Actions MDR-A -
Actions and resources in relation to material sustainability
matters. Paragraph 69 regarding disclosure of operating
expenses (OpEx) or capital expenditure (CapEx) allocated to
action plans.
The Group discloses certain metrics such as the amounts spent
on employee training and energy efficiency initiatives and
investment in community support, found in the corresponding
sections of this report and our annual accounts. 82
There is no other classified or sensitive information, or information
relating to intellectual property, know-how or innovation results,
that the Group has not included in the report.
e) Time horizons
In preparing this Sustainability statement (including the analysis of
double materiality), we used the following time horizons:
• One year for the short term (this is the standard time horizon for
the short term in the Group).
• One to five years for the medium term (financial planning).
• More than five years for the long term (strategic plan).
These horizons coincide with those provided for by the ESRS
standards. We expressly indicate the different time horizons we
use for processes or metrics described in this report.
f) Significant estimates and assumptions
The Group discloses metrics that incorporate value chain
information, which includes both direct data sources (from
customers or investees) and estimated data from third-party data
providers or sector averages. In some instances, these estimates
draw on factors that the Group is unable to influence and that may
have a significant impact on the information disclosed.
The most significant estimates and assumptions relate to the
Group’s disclosure of GHG emissions, the measurement of which is
subject to considerable uncertainty due to methodology and data
limitations, including reliance on third-party data. Our analysis and
climate target-setting uses estimates based on the recognized
frameworks available at the time. As methods and data evolve, our
data sources and figures may become outdated, and updates to
methodologies and assumptions could lead to different
conclusions. Thus, greenhouse gas emission factors are expected
to increase once data becomes available and the corresponding
companies are included in the calculations.
Climate-related targets, actions and initiatives require forward-
looking parameters and long-term horizons. Our forward-looking
statements reflect our current view of future events and are based
on expectations, projections and estimations. These involve
significant uncertainty and risk due to such factors as scientific
developments, methodology developments, standards variation,
future market conditions and technological advances (which vary
across industries), as well as challenges in data availability and
accuracy and regulatory changes. These assessments must evolve
and should not be considered reliable indicators of future
performance.
We expect improvements in data quality, coverage and availability
in the coming years, driven by increased sustainability information
reporting and disclosure obligations and other elements. We also
expect new guidance, industry standards and scientific research in
this area. For that reason, Grupo Santander reserves the right to
review and update its targets, methodologies and approach
regularly and as necessary.
The disclosure of EU Taxonomy reporting is also subject to
uncertainty over data quality and the use of third-party data. For
more details, see section NS 5. EU Taxonomy of this Sustainability
Statement.
g) Comparative information, changes in the
preparation or presentation of sustainability
information
The Group has chosen to avail itself of the transitional provision
relating to section 7.1 of NEIS 1 comparative reporting whereby
the company is not required to disclose comparative information in
the first year of application of the directive.. Except for information
that is necessary to comply with Spanish Law 11/2018 and the
perimeter of disclosure allows its comparability.
In order to comply as accurately as possible with the different
requirements established by the regulation, the following
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indicators have been subject to modification in their calculation
methodology. Therefore the information provided in this
Sustainability statement is not comparable with the information
provided in previous years.
• Number of calendar days lost due to work-related injuries and
fatalities. Fatalities have been included in this metric. In previous
years, only work-related accidents, common illnesses and non-
work-related accidents were considered.
• Energy consumption (renewable and non-renewable). This is
calculated based on the percentage of each generation source
(nuclear, renewable and fossil fuels) in each of the countries
where we consume energy and considers the renewable
electricity that we buy and self-produce. Only electricity that has
a renewable certificate is counted as renewable electricity.
• Scope 1 emissions. Emissions derived from refrigerant gas leaks
are included for the first time.
Additionally, the reporting scope that applies to the related metrics
has been modified:
• Internal consumption. The reporting scope is expanded with
information from all subsidiaries. Now covering 100% of the
Group's consolidated scope.
• Footprint compensation. Starting this year "2024", the Group
compensates scopes 1 and 2 of 100% of the Group.
Finally, scope 1 and 2 emission reduction targets have been
reviewed, based on the targets defined in the previous 2022-2025
plan. These targets are based on 2020 and have a horizon of 2030.
At the date of publication of this report, no material misstatements
of information disclosed in prior periods have been detected.
h) Incorporation by reference
This report includes all the information necessary to comply with
the requirements established in the ESRS, except in those cases in
which such information is already included in the Group's audit
report and consolidated annual accounts. In these cases, which are
detailed below, the disclosure will be made by reference to that
report.
• ESRS 2 - Disclosure requirement BP-1, paragraph 5.b).ii.
Reference is made to Appendix I of the Group's consolidated
annual accounts and audit report for the list of subsidiaries of
Banco Santander, S.A.
• ESRS 2 - Disclosure Requirement SBM-3, paragraph 48.d).
Reference is made to note 25.e) of the Group's consolidated
annual accounts and audit report to complete the information
relating to the financial effects derived from the amount of
convictions or penalties.
• ESRS 2. Minimum Disclosure Requirement - Actions MDR-A -
Actions and resources in relation to material sustainability
matters. Paragraph 69 regarding disclosure of operating
expenses (OpEx) or capital expenditure (CapEx) allocated to
action plans. Reference is made to notes 46 and 47 of the
Group's audit report and consolidated annual accounts for more
details on the connection of sustainability information with
annual accounts information.
• ESRS 2 - Minimum Disclosure Requirement - MDR-M parameters,
in relation to the positive impact of 'Act responsibly and consider
investors’ interests and the impact on employees, broader
society and the environment; pay taxes to support the
distribution of wealth'. Reference is made to note 27 of the
Group's audit report and consolidated annual accounts for more
details on the Group's tax information.
• ESRS S1 - Disclosure Requirement S1-17, paragraphs 103(c),
104(b) and AR 105. Reference is made to note 25.e) of the
Group's Annual Report and Consolidated Financial Statements to
complete the disclosures regarding serious human rights
incidents involving the company's personnel.
• ESRS S3 - Disclosure Requirements S3-1, paragraph 17 and AR
12; and S3-4, paragraph 36. Reference is made to note 25.e) of
the Group's Consolidated Annual Report and Accounts for
supplementary information on serious human rights incidents
relating to affected groups.
• ESRS S4 - Disclosure Requirements S4-4, paragraph 35.
Reference is made to note 25.e) of the Group's Consolidated
Annual Report and Accounts for supplementary information on
serious human rights incidents relating to consumers or end-
users.
• ESRS G1- G1-4, paragraphs 24.a) and 25.d). Reference is made to
note 25.e) of the Group's Annual Report and Consolidated
Financial Statements to complete the information regarding
convictions and fines for breaches of anti-corruption and anti-
bribery laws.
Sustainability note 11. 'Directive (EU) 2022/2464 content index'
provides the sections of this report and of the Group's Annual
Report and Consolidated Financial Statements where the
information that responds to each of the requirements defined by
the ESRS can be found.
i) Use of phase-in provisions in accordance with
Appendix C of ESRS 1
The following table details those requirements for which Grupo
Santander has opted to not disclosure in this first year of preparing
its sustainability report in accordance with the Commission's
delegated regulation (EU) 2023/2772.

ESRS | Disclosure requirement | Description
ESRS 2 | SBM-1, paragraph 40, b( and c) | Total revenue/Revenue by significant ESRS Sectors
ESRS 2 | SBM-3, paragraph 48 e) | Potential financial effects
ESRS E1 | E1-9 | Potential financial effects from material physical and transition risks and potential climate- related opportunities
ESRS S1 | S1-7 | Characteristics of non-employee workers in the undertaking’s own workforce
ESRS S1 | S1-14 | Health and safety: information on non-employee workers
ESRS S1 | S1-15 | Work-life balance

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List of datapoints in cross-cutting and topical standards that derive from other EU legislation
The table below illustrates the data points covered by ESRS 2 and the thematic ESRS derived from other EU legislation. For
each data point, in the last column, it is indicated whether or not it is material and if it is, where in the report the information
is located.

Disclosure Requirement and related datapoint | SFDR (1) reference | Pillar 3 (2) reference | Benchmark Regulation (3) reference | EU Climate Law (4) reference | Materiality of the data point and location in the report
ESRS 2 GOV-1 Board's gender diversity paragraph 21 (d) | Indicator number 13 of Table #1 of Annex 1 |  | Commission Delegated Regulation (EU) 2020/1816 (5), Annex II |  | Sustainability notes. SN2. Sustainability governance
ESRS 2 GOV-1 Percentage of board members who are independent paragraph 21 (e) |  |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Sustainability notes. SN2. Sustainability governance
ESRS 2 GOV-4 Statement on due diligence paragraph 30 | Indicator number 10 Table #3 of Annex 1 |  |  |  | 1. Sustainability at Grupo Santander 1.4 Sustainability governance (1.4.2 Human rights due diligence).
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities paragraph 40 (d) i | Indicators number 4 Table #1 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 (6) Table 1: Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk | Delegated Regulation (EU) 2020/1816, Annex II |  | Sustainability notes SN 11. Commission Delegated Regulation (EU) 2023/2772 on sustainability reporting standards content index (SBM-1 – Strategy, business model and value chain)
ESRS 2 SBM-1 Involvement in activities related to chemical production paragraph 40 (d) ii | Indicator number 9 Table #2 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Not material
ESRS 2 SBM-1 Involvement in activities related to controversial weapons paragraph 40 (d) iii | Indicator number 14 Table #1 of Annex 1 |  | Delegated Regulation (EU) 2020/1818 (7), Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II |  | Not material
ESRS 2 SBM-1 Involvement in activities related to cultivation and production of tobacco paragraph 40 (d) iv |  |  | Delegated Regulation (EU) 2020/1818, Article 12(1) Delegated Regulation (EU) 2020/1816, Annex II |  | Not material
ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14 |  |  |  | Regulation (EU) 2021/1119, Article 2(1) | 2. Our climate transition plan Sustainability notes SN 4. Our transition plan
ESRS E1-1 Undertakings excluded from Paris-aligned Benchmarks paragraph 16 (g) |  | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book-Climate Change transition risk: Credit quality of exposures by sector, emissions and residual maturity | Delegated Regulation (EU) 2020/1818, Article12.1 (d) to (g), and Article 12.2 |  | Sustainability notes SN 4. Our transition plan

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Disclosure Requirement and related datapoint | SFDR (1) reference | Pillar 3 (2) reference | Benchmark Regulation (3) reference | EU Climate Law (4) reference | Materiality of the data point and location in the report
ESRS E1-4 GHG emission reduction targets paragraph 34 | Indicator number 4 Table #2 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics | Delegated Regulation (EU) 2020/1818, Article 6 |  | 2. Our climate transition plan 2.4 Aiming to align our activity with the Paris Agreement Goals Sustainability notes SN 4. Our transition plan
ESRS E1-5 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) paragraph 38 | Indicator number 5 Table #1 and Indicator n. 5 Table #2 of Annex 1 |  |  |  | Sustainability notes SN 7.1 Green transition (Table 2. Environmental footprint 2023-2024)
ESRS E1-5 Energy consumption and mix paragraph 37 | Indicator number 5 Table #1 of Annex 1 |  |  |  | Sustainability notes SN 7.1 Green transition (Table 2. Environmental footprint 2023-2024)
ESRS E1-5 Energy intensity associated with activities in high climate impact sectors paragraphs 40 to 43 | Indicator number 6 Table #1 of Annex 1 |  |  |  | Sustainability notes SN 7.1 Green transition (Table 2. Environmental footprint 2023-2024)
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG emissions paragraph 44 | Indicators number 1 and 2 Table #1 of Annex 1 | Article 449a; Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 1: Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions and residual maturity | Delegated Regulation (EU) 2020/1818, Article 5(1), 6 and 8(1) |  | Sustainability notes SN 7.1 Green transitions (Table 3. Gross scopes 1, 2, 3 and total GHG emissions )
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55 | Indicators number 3 Table #1 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template 3: Banking book – Climate change transition risk: alignment metrics | Delegated Regulation (EU) 2020/1818, Article 8(1) |  | Sustainability notes SN 7.1 Green transitions (Table 3. Gross scopes 1, 2, 3 and total GHG emissions )
ESRS E1-7 GHG removals and carbon credits paragraph 56 |  |  |  | Regulation (EU) 2021/1119, Article 2(1) | Sustainability notes SN 7.1 Green transitions (Table 3. Gross scopes 1, 2, 3 and total GHG emissions )
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks paragraph 66 |  |  | Delegated Regulation (EU) 2020/1818, Annex II Delegated Regulation (EU) 2020/1816, Annex II |  | Phase-in (partially) 2. Our climate transition plan 2.3.4 Potential financial effects

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Disclosure Requirement and related datapoint | SFDR (1) reference | Pillar 3 (2) reference | Benchmark Regulation (3) reference | EU Climate Law (4) reference | Materiality of the data point and location in the report
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk paragraph 66 (a) ESRS E1-9 Location of significant assets at material physical risk paragraph 66 (c). |  | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraphs 46 and 47; Template 5: Banking book - Climate change physical risk: Exposures subject to physical risk. |  |  | Phase-in (partially) 2. Our climate transition plan 2.3.4 Potential financial effects
ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes paragraph 67 (c). |  | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34; Template 2:Banking book -Climate change transition risk: Loans collateralised by immovable property - Energy efficiency of the collateral |  |  | Phase-in (partially) 2. Our climate transition plan 2.3.4 Potential financial effects
ESRS E1-9 Degree of exposure of the portfolio to climate- related opportunities paragraph 69 |  |  | Delegated Regulation (EU) 2020/1818, Annex II |  | Phase-in
ESRS E2-4 Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant Release and Transfer Register) emitted to air, water and soil, paragraph 28 | Indicator number 8 Table #1 of Annex 1 Indicator number 2 Table #2 of Annex 1 Indicator number 1 Table #2 of Annex 1 Indicator number 3 Table #2 of Annex 1 |  |  |  | Not material
ESRS E3-1 Water and marine resources paragraph 9 | Indicator number 7 Table #2 of Annex 1 |  |  |  | Not material
ESRS E3-1 Dedicated policy paragraph 13 | Indicator number 8 Table 2 of Annex 1 |  |  |  | Not material
ESRS E3-1 Sustainable oceans and seas paragraph 14 | Indicator number 12 Table #2 of Annex 1 |  |  |  | Not material
ESRS E3-4 Total water recycled and reused paragraph 28 (c) | Indicator number 6.2 Table #2 of Annex 1 |  |  |  | Not material
ESRS E3-4 Total water consumption in m 3 per net revenue on own operations paragraph 29 | Indicator number 6.1 Table #2 of Annex 1 |  |  |  | Not material
ESRS 2- SBM 3 - E4 paragraph 16 (a) i | Indicator number 7 Table #1 of Annex 1 |  |  |  | Not material
ESRS 2- SBM 3 - E4 paragraph 16 (b) | Indicator number 10 Table #2 of Annex 1 |  |  |  | Not material
ESRS 2- SBM 3 - E4 paragraph 16 (c) | Indicator number 14 Table #2 of Annex 1 |  |  |  | Not material
ESRS E4-2 Sustainable land / agriculture practices or policies paragraph 24 (b) | Indicator number 11 Table #2 of Annex 1 |  |  |  | Not material

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Disclosure Requirement and related datapoint | SFDR (1) reference | Pillar 3 (2) reference | Benchmark Regulation (3) reference | EU Climate Law (4) reference | Materiality of the data point and location in the report
ESRS E4-2 Sustainable oceans / seas practices or policies paragraph 24 (c) | Indicator number 12 Table #2 of Annex 1 |  |  |  | Not material
ESRS E4-2 Policies to address deforestation paragraph 24 (d) | Indicator number 15 Table #2 of Annex 1 |  |  |  | Not material
ESRS E5-5 Non-recycled waste paragraph 37 (d) | Indicator number 13 Table #2 of Annex 1 |  |  |  | Not material
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39 | Indicator number 9 Table #1 of Annex 1 |  |  |  | Not material
ESRS 2- SBM3 - S1 Risk of incidents of forced labour paragraph 14 (f) | Indicator number 13 Table #3 of Annex I |  |  |  | Not material
ESRS 2- SBM3 - S1 Risk of incidents of child labour paragraph 14 (g) | Indicator number 12 Table #3 of Annex I |  |  |  | Not material
ESRS S1-1 Human rights policy commitments paragraph 20 | Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex I |  |  |  | 1. Sustainability at Grupo Santander (1.4.2 Human rights due diligence)
ESRS S1-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21 |  |  | Delegated Regulation (EU) 2020/1816, Annex II |  | 3.1 Our employees - Cross reference to: 1. Sustainability at Grupo Santander (1.4.2 Human rights due diligence)
ESRS S1-1 Processes and measures for preventing trafficking in human beings paragraph 22 | Indicator number 11 Table #3 of Annex I |  |  |  | Not material
ESRS S1-1 Workplace accident prevention policy or management system paragraph 23 | Indicator number 1 Table #3 of Annex I |  |  |  | 3.1 Our employees 3.1.2 Working conditions (i. Employee health and well-being)
ESRS S1-3 Grievance/complaints handling mechanisms paragraph 32 (c) | Indicator number 5 Table #3 of Annex I |  |  |  | 3.1 Our employees 3.1.4 Employee feedback and experience
ESRS S1-14 Number of fatalities and number and rate of work- related accidents paragraph 88 (b) and (c) | Indicator number 2 Table #3 of Annex I |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Sustainability notes 7.3 Employees (Table 22. Occupational health & safety)
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or illness paragraph 88 (e) | Indicator number 3 Table #3 of Annex I |  |  |  | Sustainability notes 7.3 Employees (Table 22. Occupational health & safety)
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a) | Indicator number 12 Table #1 of Annex I |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Sustainability notes 7.3 Employees (Table 16. Remuneration ratios)
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b) | Indicator number 8 Table #3 of Annex I |  |  |  | Sustainability notes 7.3 Employees (Table 16. Remuneration ratios)

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Disclosure Requirement and related datapoint | SFDR (1) reference | Pillar 3 (2) reference | Benchmark Regulation (3) reference | EU Climate Law (4) reference | Materiality of the data point and location in the report
ESRS S1-17 Incidents of discrimination paragraph 103 (a) | Indicator number 7 Table #3 of Annex I |  |  |  | 3.1 Our employees 3.1.3 Inclusive culture 4. Business conduct 4.2 Ethical conduct
ESRS S1-17 Non- respect of UNGPs on Business and Human Rights and OECD paragraph 104 (a) | Indicator number 10 Table #1 and Indicator n. 14 Table #3 of Annex I |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818 Art 12 (1) |  | 3.1 Our employees 3.1.3 Inclusive culture 4. Business conduct 4.2 Ethical conduct
ESRS 2- SBM3 – S2 Significant risk of child labour or forced labour in the value chain paragraph 11 (b) | Indicators number 12 and n. 13 Table #3 of Annex I |  |  |  | Not material
ESRS S2-1 Human rights policy commitments paragraph 17 | Indicator number 9 Table #3 and Indicator n. 11 Table #1 of Annex 1 |  |  |  | Not material
ESRS S2-1 Policies related to value chain workers paragraph 18 | Indicator number 11 and n. 4 Table #3 of Annex 1 |  |  |  | Not material
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph 19 | Indicator number 10 Table #1 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) |  | Not material
ESRS S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19 |  |  | Delegated Regulation (EU) 2020/1816, Annex II |  | Not material
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value chain paragraph 36 | Indicator number 14 Table #3 of Annex 1 |  |  |  | Not material
ESRS S3-1 Human rights policy commitments paragraph 16 | Indicator number 9 Table #3 of Annex 1 and Indicator number 11 Table #1 of Annex 1 |  |  |  | Not material
ESRS S3-1 non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines paragraph 17 | Indicator number 10 Table #1 Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) |  | Not material
ESRS S3-4 Human rights issues and incidents paragraph 36 | Indicator number 14 Table #3 of Annex 1 |  |  |  | Not material
ESRS S4-1 Policies related to consumers and end-users paragraph 16 | Indicator number 9 Table #3 and Indicator number 11 Table #1 of Annex 1 |  |  |  | 3.3 Our customers
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines paragraph 17 | Indicator number 10 Table #1 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, Art 12 (1) |  | 3.3 Our customers - Cross reference to: 1. Sustainability at Santander (1.4.2 Human rights due diligence)

83 The diversity ratio is calculated by dividing the number of women by men. The percentage of each gender vs total membership is 40% women and 60% men.
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Disclosure Requirement and related datapoint | SFDR (1) reference | Pillar 3 (2) reference | Benchmark Regulation (3) reference | EU Climate Law (4) reference | Materiality of the data point and location in the report
ESRS S4-4 Human rights issues and incidents paragraph 35 | Indicator number 14 Table #3 of Annex 1 |  |  |  | Not material
ESRS G1-1 United Nations Convention against Corruption paragraph 10 (b) | Indicator number 15 Table #3 of Annex 1 |  |  |  | 4. Business conduct 4.2 Ethical conduct (4.2.3 Financial crime compliance)
ESRS G1-1 Protection of whistle- blowers paragraph 10 (d) | Indicator number 6 Table #3 of Annex 1 |  |  |  | 4. Business conduct 4.3 Ethical channels
ESRS G1-4 Fines for violation of anti- corruption and anti-bribery laws paragraph 24 (a) | Indicator number 17 Table #3 of Annex 1 |  | Delegated Regulation (EU) 2020/1816, Annex II) |  | 4. Business conduct 4.2 Ethical conduct (4.2.3 Financial crime compliance)
ESRS G1-4 Standards of anti- corruption and anti- bribery paragraph 24 (b) | Indicator number 16 Table #3 of Annex 1 |  |  |  | 4. Business conduct 4.2 Ethical conduct (4.2.3 Financial crime compliance)

(1) Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector
(Sustainable Finance Disclosures Regulation) (OJ L 317, 9.12.2019, p. 1).
(2) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and
amending Regulation (EU) No 648/2012 (Capital Requirements Regulation “CRR”) (OJ L 176, 27.6.2013, p. 1).
(3) Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts
or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016,
p. 1).
(4) Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending
Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).
(5) Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as
regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406,
3.12.2020, p. 1).
(6) Commission Implementing Regulation (EU) 2022/2453 of 30 November 2022 amending the implementing technical standards laid down in Implementing Regulation
(EU) 2021/637 as regards the disclosure of environmental, social and governance risks (OJ L 324,19.12.2022, p.1.).
(7) Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as
regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17)."
SN 2. Sustainability governance
Board of directors
It consist of 15 members, of which 13 are non-executive directors
and 2 are executive directors. The majority are independent
directors (66.67% of the total members of the council).
Likewise, the board of directors shall ensure that the procedures to
select members guarantee the individual and collective expertise
of directors, encourage diversity in terms of gender, age,
geographical origin, experience and knowledge, and do not carry
any implicit bias that could lead to any form of discrimination on
grounds such as disability, race or ethnic origin. The board
currently has a balanced presence of both genders (women -men)
with a diversity ratio of 67%. 83 In terms of geographical origin/
international experience, 60% of the directors come from or
studied in continental Europe, 60% in the US/UK, 13% in Latin
America, and 7% in other regions. The Board also has extensive
international experience, mainly in the markets where we operate
(European market, US and UK markets, and Latin American
markets). The Board also has the skills and experience to monitor
materiality issues (e.g. on issues related to sustainability, human
resources, culture, talent and remuneration, as well as to business
conduct and risk management). None of the directors are currently
assigned a specific employee representation role.
The board of directors as the highest decision-making body in the
Group performs the following functions:
• approves the Responsible Banking agenda and set the strategy;
• approves the culture policy and related policies on responsible
business and sustainability matters and, in particular, on
environmental and social matters;
• supervise that the responsible banking strategy is consistent
with Group strategy;
• reviews the performance against the public objectives and that
the metrics are covered within the responsible banking agenda;
• tracks key initiatives; and
• reviews subsidiaries’ strategies.
For more details, see the Rules and Regulations of the board of
Directors, available on the Group's corporate website; and section
4.2 'Board composition' in the 'Corporate governance' chapter.
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Responsible banking, sustainability and cultural
committee
The responsible banking, sustainability and cultural committee
(RBSCC) assists the board in fulfilling its supervisory
responsibilities regarding the responsible business strategy and
sustainability issues of Banco Santander and its Group. In
particular, it has the following functions:
(i) advise the council on the design of the strategy and policies on
responsible business and sustainability, in particular
environmental and social matters, by monitoring, supervising and
evaluating them;
(ii) Advise the council in formulating the Group’s strategy with
interest groups; as well as supervise the involvement with them;
(iii) ensure that adequate control processes are in place with
respect to responsible banking practices, and that risks and
opportunities related to sustainability and accountability are
identified and managed; and
(iv) to report regularly to the council on the progress made by the
Group on responsible business practices and sustainability.
The responsible banking, sustainability and culture committee
consists of five independent directors, 80% of whom are women.
All of them have been appointed by the board of directors taking
into account their knowledge, qualifications a nd experience in the
areas for which the committee is responsible. Thus, its members
have competence in issues relevant to this function as strategy and
human resources, culture, talent and remuneration, responsible
business and sustainability, risk management and also in issues
related to education and universities.
In 2024, the committee held five meetings, and, among others, the
following topics were discussed.
Environmental issues:
• Reviewed the Group’s climate change strategy and alignment
targets. Endorsed the Group priorities for 2024 in relation to
sustainability, including supporting our customers in their green
transition.
• Reviewed ESG factors introduced in the credit approval process,
associated action plans and related achievements. Worked with
the risk supervision, regulation and compliance committee to
review the progress made in embedding climate-related and
environmental risks, as well as to monitor the implementation of
controls and processes to mitigate ESG risks.
• Reviewed the green finance strategy and its execution.
• Monitored our own environmental footprint, value chain
emissions and carbon neutral claim.
Social issues:
• Reviewed our social agenda, which includes financial inclusion;
financial health; business with social output; and corporate social
responsibility or philanthropic activities. And reviewed the
outcomes of the holistic human rights due diligence exercise.
• Reviewed the progress made within our community support
strategy, which includes Santander Universidades strategy and
its alignment with the Group's transformation agenda.
• Discussed People and Culture's activities and progress and
proposals regarding inclusive culture in coordination with the
nomination and remuneration committees, with a key focus on
the representation of women in senior positions within the
Group.
Governance issues:
• Identified priority sustainability areas for action based on the
outcomes of a materiality assessment that the Sustainability
team conducts every year. Verified that the proposed
sustainability agenda and targets remained aligned with the
Group´s strategy. Monitored and assessed the Group's progress
on its targets to control that its KPI remained relevant and
aligned with committee expectations. And reviewed ESG global
ratings' assessments of Banco Santander.
• Assisted the board in ensuring that sustainability targets and
metrics were embedded in the Group's remuneration schemes.
As part of that, reviewed, in coordination with the remuneration
committee, a proposal to further increase the alignment of the
long-term incentive for 2024-2026 with our sustainability
agenda.
• Reviewed the progress made regarding the management of the
supply chain in regards to ESG.
• Supported the audit committee on the supervision and
assessment of the process to prepare and present non-financial
information.
• Reviewed the main European and international financial
regulatory and supervisory initiatives and priorities related to
sustainability. Received information on local regulatory
developments.
In addition, it received specific training in sustainability, with
special attention to the new Corporate Sustainability Reporting
Directive (CSRD).
For more details, see the Rules and Regulations of the board of
Directors, available on t he Group's corporate website; and sections
4.2 'Board composition' and 4.9 'Responsible banking,
sustainability and cultural committee activities in 2024' in the
'Corporate governance' chapter.
Board audit committee
The board audit committee (BAC) assists the board in overseeing
and reviewing the financial and sustainability information process,
as well as internal control systems.
The audit committee consists of five independent directors, 60% of
whom are women. All of them have been appointed by the board
of directors based on their knowledge, qualifications and
experience in the areas of finance, accounting and auditing,
internal control, information technology, business or risk
management.
In 2024, the committee held 15 meetings, including four joint
sessions with the risk supervision, regulation and compliance
committee. With regard to sustainability reporting, the committee
oversaw the sustainability reporting process, receiving regular
updates from the Group's Chief Accounting Officer (CAO) and the
main functions responsible for sustainability reporting.
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For more details, see the Rules and Regulations of the board of
Directors, available on the Group's corporate website; and sections
4.2 'Board composition' and 4.5 'Audit committee activities in
2024 ' of the 'Corporate governance' chapter.
Risk supervision, regulation and compliance
committee
The risk supervision, regulation and compliance committee
supports and advises the board in defining and assessing risk
policies that affect the Group and in determining the current and
future risk appetite and the strategy and culture in this area,
including proposing appropriate changes in view of internal or
external circumstances that impact on the Group (both financial
and non-financial risks), among other functions.
The risk supervision, regulation and compliance committee
consists of five external directors (40% women), with three
independent members, including its chair. All of them have been
appointed by the board of directors based on their knowledge,
qualifications and experience in the areas for which the committee
is responsible. Thus, its members have competence in issues
relevant to this function as banking, accounting, auditing and
financing, strategy, risk management, governance and control, as
well as in human resources, culture, talent and remuneration.
In 2024, the committee held 18 meetings, including one strategy
session, four joint sessions with the audit committee, one joint
session with the nomination committee and one joint session with
the remuneration committee. It reviewed relevant topics on
customer data protection, operational resilience, aspects of
customer conduct, complaints and internal whistleblowing. Issues
such as culture and internal control are also addressed.
For more information see: the Rules and Regulations of the Board
of Directors, available on the Group's corporate website; and
sections 4.2 'Board composition' and 4.8 'Risk supervision,
regulation and compliance committee activities in 2024' in the
'Corporate governance' chapter.
Other committees of the Group board, such as the Nomination and
Remuneration Committees, also support and review sustainability-
related issues. For further details, see section 4. 'Board of
Directors' in the 'Corporate Governance' chapter.
Other governance bodies
The corporate accounting and financial reporting, management
and sustainability committee performs these functions (among
others):
• Approve the content and scope of sustainability disclosures.
• Analyze and validate or, when applicable, propose the approval
of all significant sustainability information.
This committee meets monthly, or on an extraordinary basis when
deemed appropriate.
The risk control committee (CCR) is responsible for controlling
risks and providing a holistic view of them. Determines whether
lines of business are managed according to the risk appetite
approved by the board. It also identifies, tracks and evaluates the
impact of current and emerging risks on the Group’s risk profile.
The CCR is composed of senior management members in the
functions of risk, compliance and conduct, financial and general
intervention, among others.
Other forums and support functions
First line of defence
Business functions and all other functions that generate risk
exposure are the first line of defence. The first line of defence
identifies, measures, controls, tracks and reports the risks that
originate and applies the policies, models and procedures that
regulate risk management. Risk generation must be adjusted to the
approved risk appetite and associated limits. The head of each unit
that generates a risk has primary responsibility for managing it.
The corporate sustainability function works continuously to
define, execute and monitor our sustainability strategy, and
coordinates and drives the responsible banking agenda, with
support from a senior adviser on responsible business practices
who reports directly to the executive chair, as well as with the
sustainability network in our core markets, global businesses and
corporate functions.
The accounting and management control function, is responsible
for (among others):
• establishing and maintaining the internal control system on the
financial and sustainability information generated by the
function; and
• Implementing the standards and policies reflected in the
sustainability information sent to the Corporation.
It is the responsibility of the functions involved in executing the
strategy and preparing information on sustainability (for example:
Technology, Operations, Risks, Human Resources, Tax, and others)
that the information provided is true and reliable, establishing the
necessary controls and correcting any weaknesses.
Second line of defence
Risk and Compliance & Conduct functions, as the second line of
defence, will provide independent challenge and oversight of the
risk management activities performed by the first line of defence.
This second line of defence should control, within their respective
domains of responsibility, that risks are managed in accordance
with the risk appetite defined by senior management and promote
a strong risk culture throughout the organization.
The internal control function within the Enterprise Wide Risk
Management (EWRM) function will be responsible for establishing
the criteria and monitoring the implementation and effectiveness
of the Santander Group Internal Control System. This will help to
the adequacy and integrity of the internal controls established by
the different functions to provide reasonable assurance in the
achievement of the defined objectives (which include, among
others, the reliability of financial and sustainability reporting).
Third line of defence
The internal audit function periodically assesses that policies,
methods and procedures are adequate and effectively applied for
the management and control of accounting, financial and
management information. The annual audit plan, which was
carried out on the basis of a robust risk assessment process (Top-
down & Bottom-up methodology), provides reviews of the main
aspects contained in this report.
In this way, issues related to climate risk and disclaimers are
regularly verified as well as compliance with the rules and
procedures established in the General Code of Conduct (GCC),
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independently monitoring their adequacy and effectiveness and
those of their local developments. the Open Channel is reviewed
and specifically evaluates compliance with data protection
regulations.
The audit function reports to the Audit Committee, which, among
other functions, assists the board in the supervision and evaluation
of the process of preparing and presenting financial and non-
financial information, as well as internal control systems.
Risk management and internal controls over
sustainability information
In order to control the quality and reliability of the information
included in the Sustainability statement, Santander implemented
an internal control system that complies with the most demanding
international standards and complies with the guidelines
established by the Committee of Sponsoring Organisations of the
Treadway Commission (COSO).
Like the Sustainability information itself, at Santander we are
evolving our Internal Control System so that it covers all the
material aspects identified for 2026.
First, we identify the most material risks and then establish the
necessary controls, complying with the requirements regarding the
disclosure of sustainability information.
The most significant aspects taken into account in the process of
preparing sustainability information are the following:
• Identification and definition of quantitative and qualitative
criteria that emanate from regulatory interpretation or our
impacts risks and opportunities in areas where there are no
consolidated market practices.
• The hypotheses, judgments, estimates and approximations used
in the calculation and preparation of certain metrics.
• Ensuring the completeness of information and establishing
perimeters for each metric or group of metrics.
• Difficulties in having, in certain respects, third-party information
necessary for the construction of our narrative or metrics,
especially in the value chain (emissions information from our
portfolio, alignment information, supplier information, etc.).
• Calculation, processing and consolidation of both quantitative
and qualitative information.
In addition, we also began to prepare reasonable assurance of
several of the metrics to convergence in the quality standards of
financial and sustainability information.
Similarly to the control of financial information, the
implementation and supervision of the control system of
sustainability information is carried out through the following
bodies: Board of Directors, Audit committee, Risk Control
committee and Corporate Accounting and Financial, Management
and Sustainability Reporting committee.
For more details, see the introductory paragraph “Sustainability
information” of the consolidated management report itself; section
8. 'Internal control over financial reporting (ICFR)' in the 'Corporate
governance' chapter; and section 1.5 'Internal control system' in
the 'Risk management and compliance' chapter.
Internal control system for sustainability information
Control culture
Basis of Internal
Control. Essential to
provide reasonable
assurance in achieving
the objectives defined
by the Group, acting
responsibly.
Risk Assessment
(RCSA)
Dynamic process of
evaluating the risks
associated with
achieving the
organization's
objectives.
Control Activities
Actions established by
policies and
procedures that help
that management
instructions are carried
out to mitigate
identified risks.
Information and
Communication
Accurate and timely
information for
decision-making,
facilitating the
escalation and
governance of
improvements and
incidents.
Monitoring activities
Mechanisms and
instruments to monitor
the correct
implementation and
effectiveness of the
internal control
system, promoting a
continuous evaluation
of the same.
Cross-cutting regulations to embed ESG standards in
our business model
Responsible banking framework
Establishes responsible banking as a strategic topic for Grupo
Santander and all local units.
Accounting and Financial Reporting, Management and
Sustainability information framework
Sets out the principles, directives and guidelines regarding the
preparation of accounting, financial and management information
that must be applied by all Group subsidiaries as an essential
element of proper governance.
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Responsible banking and sustainability policy
Sets out our sustainability principles, targets and strategy
(including human rights protection) to create long-term
stakeholder value.
Responsible banking model
Sets out the roles and responsibilities of the first, second and third
line of defence in all responsible banking-related activity to drive
our sustainability agenda, embed ESG standards and achieve our
goals.
In addition to these regulations, which apply to all the Group’s
units and businesses, the following section of this chapter details
the regulations that apply specifically to the management of each
of the material topics and associated IROs:
• Climate change (see section 2. 'Our climate transition plan');
• Own workforce (see section 3.1 'Our employees' );
• Consumers and end users (see section 3.3 'Our customers');
• Affected communities (see section 3.2. 'Communities'
sustainable development'),
• Business conduct (see section 4. 'Business conduct').
All regulations (corporate frameworks, models, policies and
procedures) help maintain a high level of governance, and the
highest standards in terms of their drafting, approval, and in the
monitoring of their local transposition.
The approval of the regulations is responsibility of the Board of
Directors or its committees, when the regulated matter falls within
their scope of responsibility according to their rules and
regulations. Corporate frameworks in all cases must be approved
by the board of directors. The regulations approved by the board
under this chapter are as follows:
→ Relevant corporate frameworks related to sustainability:
Responsible Banking, Risk; Cybersecurity; Compliance and
conduct; Financial Crime and compliance; Human resources.
→ Relevant policies related to sustainability: Responsible banking
and sustainability; Code of conduct; Code of conduct in securities
markets; Corporate Defence; Environmental, social and climate
change risk; Tax; Conflict of interest; Defence sector; Anti-money
laundering and countering the financing terrorism;
Remuneration; Performance management; Group Succession;
Culture.
For more details on the Group's key regulatory documents on
sustainability, see our corporate website santander.com.
SN 3. Materiality assessment – Detailed methodology
The Group and subsidiaries’ double materiality assessments are
based on European Sustainability Regulatory Standards (ESRS) 1
and 2, and the Double Materiality Assessment Guide from the
ERAG.
Our assessment comprised these phases:
1. Background and stakeholder analysis
General view of the bank, its operations and main lines of business,
based on:
→ Information on the entity: Sources include strategic and
financial plans, financial statements and other published reports.
This analysis considers operations, products and services,
geographical footprint, business relationships and the value
chain.
→ External information: Public documents on sector trends,
analyst and supervisor papers, and peers’ sustainability reports.
To enhance this background analysis, we also use these external
sources:
1. The UNEP FI impact analysis tool to uncover the impact of the
Group’s financing operations, including those related to climate
change. This tool provides a in-built impact mappings that
combined, with our internal data and context, enables us to
identify the most significant impact areas of the portfolio.
2. The ENCORE (environmental risk assessment) database to
obtain information on the bank customer’s environmental
dependencies.
ENCORE: a materiality database of dependencies between
production processes and ecosystem services.
3. Human rights due diligence to spot the actual and potential
impact of the bank’s operations on human rights throughout the
value chain.
We use the stakeholder analysis to identify directly affected
stakeholders (customers, employees and investors) and readers of
the report (supervisors and regulators, our communities and
NGOs). We analyse information gathered during stakeholder
engagement exercises and conduct surveys on sustainability
matters to use as part of our materiality assessment.
2. Identification of impacts, risks and
opportunities
The background analysis uncovered +100 IROs. We categorize
every IRO and assign them to a topic, sub-topic or sub-sub-topic
under ESRS 1, AR 16. For each IRO, we detail:
→ the part of the value chain they touch and over what time frame.
→ the dependencies between impacts and risks, assessing how
each impact can lead to new risks and opportunities, with a
special focus on the negative impacts of the human rights due
diligence exercise; and
→ who in the organization manages it.
→ What is the type of financial effect for risks and opportunities.
84 Hemos consultado a las dos principales funciones del Grupo que monitorean esta actividad
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3. Assessment of impacts, risks and
opportunities
The methodology we use to measure materiality follows the
EFRAG implementation guidance. After applying that methodology
in this phase, 32 IROs were material.
Impact
We analyse the materiality of actual and potential impacts based
on the likelihood and severity of occurrence and, in the case of
negative impacts, include irreparable impacts.
→ Scale (size of impact): split into five categories: Low, moderately
low, medium, high, very high.
→ Scope: split into four categories: Local, national, international,
global.
→ Irreparable impact (when negative): split into four levels;
reparable, reparable with moderate effort, difficult to repair, and
irreparable.
We estimate the likelihood of impact on a scale of 1 to 5.
Risks
We adapted our methodology according to the maturity of
quantifying environmental and social risks.
→ The climate materiality assessment includes a climate risk
assessment (transition and physical) across several time
horizons to align with the EBA’s Guidelines on the management
of ESG risks and other EU risk management directives. We used
this information to quantify the materiality of credit, market,
operational, reputational and other risks.
→ We assessed other environmental risks related to Pollution,
Water and marine resources, Biodiversity and ecosystems and
Resource use and circular economy through the exercise
described in the section 2.3.5. “Our approach to nature and
biodiversity”. This assessment sought to identify connection
between our portfolios and nature in line with target 15 of the
Kunming-Montreal Global Biodiversity Framework adopted at
the COP15 in 2022.
→ For social and governance risks, we used the Sustainability
Accounting Standards Board’s (SASB) financial materiality and
internal financial information.
Opportunities
We base the opportunities assessment on forecasts for all our
global businesses. We mapped out projected ESG revenue against
the identified opportunities and compared it to the Group’s revenue
on a scale of 1 to 5.
Stakeholder views
We supplement IROs assessments with stakeholder views
(affected groups and readers of the report).
The number of specific inputs received within this exercise is
detailed below. These inputs are part of the constant dialogue with
our stakeholders, as detailed in section 1.2. Dialogue with our
stakeholders.

Retail Customers |  | Investors |  | NGOs |  | Senior management |  | Employees |  | Regulators and supervisors 84
N = 9000+ |  | N = 8 |  | N = 3 |  | N = 8 |  | N = c.200 |  | N = 2

The survey results show agreement in prioritizing three areas: the
fight against climate change and supporting the green transition;
protecting customer data; information transparency and fostering
financial inclusion. Specifically:
• Retail customers prioritize social (privacy and personal data
security) and governance matters (transparency and honesty).
• Employees and senior management prioritize each ESG area
equally.
• Investors, regulators and NGOs prioritize environmental
matters.
4. Materiality thresholds
We set a threshold of 3.5 on a scale of 1 to 5 to classify an IRO as
material (for impact perspective and financial materiality). This
means that we consider IROs that sit between medium (3) and high
(4) as material. Taken as a reference the score calculation for the
impacts, the score values greater than 3.5 represent events of
medium-high severity and events with medium-high probability of
occurrence.
We also assessed the reasonability and coherence of the list of
IROs identified as material. In quantitative terms assuming that the
distribution of the events materiality follows a normal distribution
(average=3 and standard deviation = 0.5), the probability of a score
value of 3.5 is around 16%, which is considered reasonable for a
material event.
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Information on impacts, risks and opportunities (IROs)

ESRS | IRO description | IRO type | Value chain | Summary of current/ potential effects (narrative) | People/ environment | Strategy- and business model-related impacts | Time horizon 1 | Linked to impact due to own operations or business relations 2 | Systemic/ specific | Core activities that lead to positive impacts | Risks and/or opportunities stemming from impacts | More details
E1 - Climate change | Contribute to protecting the environment by driving an increase in the use of renewable energy and other low-carbon technology. | Positive impact | Downstream | - Promote the development of innovative, clean technology and our customers’ transition | Environment | 1. Help our customers in their green transition while also managing climate-related risks and impacts | Short/ medium term | Business relations | N/A | N/A | N/A | 2.2 Supporting our customers in their transition goals
E1 - Climate change | Contribute to reducing the Group’s scope 1 and 2 greenhouse gas emissions. | Positive impact | Own operations | - Reducing our environmental footprint | Environment | 1. Help our customers in their green transition while also managing climate-related risks and impacts | Short/ medium term | Own operations | N/A | N/A | N/A | 2.4 Aiming to align our activity with the Paris Agreement Goals - 2.4.5 Our environmental footprint
E1 - Climate change | Adverse impact on the environment due to the bank’s financing of, or investment in, non- sustainable assets and activities | Negative impact | Downstream | - Adverse environmental impact | Environment | 1. Help our customers in their green transition while also managing climate-related risks and impacts | Short/ medium term | Business relations | N/A | N/A | N/A | 2.4 Aiming to align our activity with the Paris Agreement Goals
E1 - Climate change | Growth in the financing of renewable energy and other energy transition solutions. | Opportunity | Downstream | - Support clean technology through our financial product proposition | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 2.2 Supporting our customers in their transition goals
E1 - Climate change | Revenue growth by providing our customers with sustainable solutions in such sectors as construction, mobility or agriculture. | Opportunity | Downstream | - Grow our revenue by providing sustainable solutions in several sectors and partnering our customers in their transition | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 2.2 Supporting our customers in their transition goals
E1 - Climate change | Reputational risk based on the perception of our progress with climate- related policies and objectives | Risk | Own operations and downstream | - Potential reputational damage if risks materialize | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 2.3 Embedding climate in risk management - 2.3.3 Reputational risk
S1 - Own workforce | Promote the health, well-being and security of our employees in a safe and inclusive work place; facilitate a positive work-life balance through flexible working. | Positive impact | Own operations | - Contribute positively to a workplace that promotes flexible working, health and well-being | People | 2. Help our employees develop by promoting diversity and learning and providing fair working conditions. | Short/ medium term | Own operations | N/A | Global health and well- being strategy that sets out how we protect the health, safety and well- being of our employees and promote a healthy lifestyle. | N/A | 3.1 Our employees - 3.1.1 Working conditions - i. Employee health and well-being
S1 - Own workforce | Promote a workforce that reflects the society we live in and encourages collaboration; guarantee the same opportunities for all our employees, irrespective of gender, disability or other characteristics. | Positive impact | Own operations | - Contribute positively to an inclusive environment that offers equal opportunity for all | People | 2. Help our employees develop by promoting diversity and learning and providing fair working conditions. | Short/ medium term | Own operations | N/A | Global inclusive culture strategy for 2020-2025 that drives us to act ethically, purposefully and transparently. | N/A | 3.1 Our employees - 3.1.2 Equal opportunity for all

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ESRS | IRO description | IRO type | Value chain | Summary of current/ potential effects (narrative) | People/ environment | Strategy- and business model-related impacts | Time horizon 1 | Linked to impact due to own operations or business relations 2 | Systemic/ specific | Core activities that lead to positive impacts | Risks and/or opportunities stemming from impacts | More details
S1 - Own workforce | Promote continuous career development and personal growth through learning and development programmes | Positive impact | Own operations | - Promote training, development and personal growth among employees | People | 2. Help our employees develop by promoting diversity and learning and providing fair working conditions. | Short/ medium term | Own operations | N/A | Create talent programmes to promote individual growth while considering business demands. | N/A | 3.1 Our employees - 3.1.3 Talent and skills development
S1 - Own workforce | Promote the general well-being of employees and provide appropriate remuneration under equal conditions based on merit and market rates | Positive impact | Own operations | - Promote appropriate and equal remuneration | People | 2. Help our employees develop by promoting diversity and learning and providing fair working conditions. | Short/ medium term | Own operations | N/A | Remuneration framework that combines fixed and variable pay schemes based on targets for employees and the Group. | N/A | 3.1 Our employees - 3.1.1 Working conditions - ii. Remuneration and corporate benefits
S1 - Own workforce | Harm employees through discriminatory conduct, inadequate working conditions, harassment or corruption | Negative impact | Own operations | - Potential harm to employees through an inadequate working environment and conditions. | People | 2. Help our employees develop by promoting diversity and learning and providing fair working conditions. | Short/ medium term | Own operations | Systemic | N/A | N/A | 3.1 Our employees - 3.1.2 Equal opportunity for all
S1 - Own workforce | Potential risk of conflict with employees due to poor management or ethical or conducts failings | Risk | Own operations | - Potential harm if risks materialize | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 3.1 Our employees - 3.1.1 Working conditions - i. Employee health and well-being
S4 - Consumers and end users | The customer benefits from the bank’s development of products and services that adapt to their needs and expectations and promote financial inclusion and health. | Positive impact | Own operations | - Promote customer inclusion through products and services that adapt to their needs | People | 4. 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. | Short/ medium term | Own operations | N/A | Develop products and services and special programmes to achieve financial health and inclusion | N/A | 3.3 Our customers - 3.3.2 Financial health and inclusion - i. Financial inclusion
S4 - Consumers and end users | Education on, and awareness of, cyber security to understand potential threats and ways to repel them | Positive impact | Own operations | Knowledge and awareness of cybersecurity matters to help reduce online threats | People | 4. 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. | Short/ medium term | Own operations | N/A | Interactive campaigns, awareness workshops, corporate sponsorship, podcasts | N/A | 3.3 Our customers - 3.3.3 Privacy, data protection and cybersecurity
S4 - Consumers and end users | Negative impact on the customer if they do not have access to complaints channels or if, after making a complaint, the bank fails to take the necessary action | Negative impact | Own operations | - Potential breakdown of trust and long-term relationships with customers | People | 4. 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. | Short/ medium term | Own operations | Systemic | N/A | N/A | 3.3 Our customers - 3.3.1 Customer conduct

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ESRS | IRO description | IRO type | Value chain | Summary of current/ potential effects (narrative) | People/ environment | Strategy- and business model-related impacts | Time horizon 1 | Linked to impact due to own operations or business relations 2 | Systemic/ specific | Core activities that lead to positive impacts | Risks and/or opportunities stemming from impacts | More details
S4 - Consumers and end users | Negative impact on the customer if the bank fails to provide sufficient information on the product or service they are signing up for | Negative impact | Downstream | - Potential breakdown of trust and long-term relationships with customers | People | 4. 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. | Short/ medium term | Business relations | Systemic | N/A | N/A | 3.3 Our customers - 3.3.1 Customer conduct
S4 - Consumers and end users | Negative impact stemming from a potential infringement of customers’, employees’ or shareholders’ rights due to a lack of appropriate technical or organizational measures to protect their personal data according to law and the practices set by the Group | Negative impact | Upstream | - Potential breakdown of trust and long-term relationships with customers | People | 4. 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. | Short/ medium term | Business relations | Systemic | N/A | N/A | 3.3 Our customers - 3.3.3 Privacy, data protection and cybersecurity
S4 - Consumers and end users | Negative impact on the customer by failing to guarantee access to, or the use of, products and services that may present certain obstacles or weak spots | Negative impact | Own operations | - Potential breakdown of trust and long-term relationships with customers | People | 4. 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. | Short/ medium term | Own operations | Systemic | N/A | N/A | 3.3 Our customers - 3.3.1 Customer conduct - iv. Vulnerable customers
S4 - Consumers and end users | Potential losses due to sanctions or a reduction in the number of customers because of a failure to detect or respond effectively to breaches of privacy | Risk | Downstream | - Potential harm if risks materialize | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 3.3 Our customers - 3.3.3 Privacy, data protection and cybersecurity
S4 - Consumers and end users | Potential losses due to claims or a reduction in the numbers of customers because of substandard customer practices throughout their life cycle | Risk | Downstream | - Potential harm if risks materialize | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 3.3 Our customers - 3.3.1 Customer conduct

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ESRS | IRO description | IRO type | Value chain | Summary of current/ potential effects (narrative) | People/ environment | Strategy- and business model-related impacts | Time horizon 1 | Linked to impact due to own operations or business relations 2 | Systemic/ specific | Core activities that lead to positive impacts | Risks and/or opportunities stemming from impacts | More details
S3 - Affected communities | Contribution to education, employability and entrepreneurship, as well as to community development through support programmes | Positive impact | Own operations | - Enhance education, employability and entrepreneurship opportunities, and contribute positively to addressing social needs in the communities we serve | People | 3. Contribute to the economic, financial and social development of our communities, with a special focus on education, employability and entrepreneurship. | Short/ medium term | Own operations | N/A | - Education: Grants and scholarships for students and researchers to access and complete their studies; and support to universities in overcoming their key challenges (i.e. digitalization) - Employability: Support lifelong learning; and facilitate access to employment in the early stages of people’s career. - Entrepreneurship: Provide access to the training, advice and resources (including benefits). | N/A | 3.2 Supporting our communities’ sustainable development - 3.2.4 Supporting communities
S3 - Affected communities | Drive economic growth and job creation in the regions where we operate and provide credit to people and businesses | Positive impact | Downstream | - Grow the economy by helping people and businesses | People | 3. Contribute to the economic, financial and social development of our communities, with a special focus on education, employability and entrepreneurship. | Short/ medium term | Business relations | N/A | Lending to create or grow businesses; microloans to microentrepreneurs to support the start-up and expansion of their businesses; and mortgages and loans for other items. | N/A | 3.2 Supporting our communities’ sustainable development - 3.2.1 Supporting our economy and the social development of our communities
S3 - Affected communities | Contribution to sustainable development through financing and investment that promotes sustainable performance in companies, addresses societal challenges, mitigates a specific issue, or pursues positive societal outcomes | Positive impact | Downstream | - Grow the economy, with a focus on activities that promote ESG performance; address social challenges; mitigate a specific social issue; or pursue positive social outcomes | People | 3. Contribute to the economic, financial and social development of our communities, with a special focus on education, employability and entrepreneurship. | Short/ medium term | Business relations | N/A | - Label operations. - Propose investment that covers ESG factors and sustainability objectives. | N/A | 3.2 Supporting our communities’ sustainable development - 3.2.2 Socially responsible investment and lending

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ESRS | IRO description | IRO type | Value chain | Summary of current/ potential effects (narrative) | People/ environment | Strategy- and business model-related impacts | Time horizon 1 | Linked to impact due to own operations or business relations 2 | Systemic/ specific | Core activities that lead to positive impacts | Risks and/or opportunities stemming from impacts | More details
S3 - Affected communities | Finance activities (in any customer segment) that breach of the bank’s policies and jeopardize the well-being of present and future generations | Negative impact | Downstream | - Potential damage to people’s well-being | People | 3. Contribute to the economic, financial and social development of our communities, with a special focus on education, employability and entrepreneurship. | Short/ medium term | Business relations | Systemic | N/A | N/A | 3.2 Supporting our communities’ sustainable development - 3.2.3 Environmental, social and climate change management
S3 - Affected communities | Potentially negative impact on the environment or society by failing to sufficiently involve stakeholders or use suitable customer identification and management mechanisms when providing finance to a customer or project | Negative impact | Own operations | - Potential damage to people’s well-being and/ or to the environment | People/ environment | 3. Contribute to the economic, financial and social development of our communities, with a special focus on education, employability and entrepreneurship. | Short/ medium term | Own operations | Systemic | N/A | N/A | 3.2 Supporting our communities’ sustainable development - 3.2.3 Environmental, social and climate change management
G1 - Business conduct | Act responsibly and consider investors’ interests and the impact on employees, broader society and the environment; pay taxes to support the distribution of wealth | Positive impact | Own operations | - Promote decision- making that considers all stakeholders’ interests | People/ environment | 5. Act responsibly through a strong culture, governance and conduct. | Short/ medium term | Own operations | N/A | N/A | N/A | 4.2 Ethical behaviour
G1 - Business conduct | Protect the confidentiality of users of the bank’s ethical channel and have an effective reporting system in place that follows robust principles and procedures | Positive impact | Own operations | - Availability of mechanisms for stakeholders to escalate confidentially and/or anonymously (and according to regulatory requirements) substandard practices by the bank and its people | People | 5. Act responsibly through a strong culture, governance and conduct. | Short/ medium term | Own operations | N/A | N/A | N/A | 4.3 Ethical channels
G1 - Business conduct | Promote responsible practices among vendors; engage with them, assess their ESG performance and give them recommendations and tools to improve | Positive impact | Own operations | - Promote responsible practice in our value chain | People/ environment | 5. Act responsibly through a strong culture, governance and conduct. | Short/ medium term | Own operations | N/A | N/A | N/A | 4.4 Our suppliers

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ESRS | IRO description | IRO type | Value chain | Summary of current/ potential effects (narrative) | People/ environment | Strategy- and business model-related impacts | Time horizon 1 | Linked to impact due to own operations or business relations 2 | Systemic/ specific | Core activities that lead to positive impacts | Risks and/or opportunities stemming from impacts | More details
G1 - Business conduct | Negative impact on the environment or broader society by failing to implement measures to resolve incidents through complaints or reporting channels or due to a lack of continuous improvement actions | Negative impact | Own operations | - Potential harm to people and/or the environment; loss of stakeholders’ trust in the channel’s effectiveness | People/ environment | 5. Act responsibly through a strong culture, governance and conduct. | Short/ medium term | Own operations | N/A | N/A | N/A | 4.3 Ethical channels
G1 - Business conduct | Harm broader society through bribery or corruption | Negative impact | Own operations | - Potential loss of customers’ and other stakeholders’ trust | People | 5. Act responsibly through a strong culture, governance and conduct. | Short/ medium term | Own operations | N/A | N/A | N/A | 4.2 Ethical behaviour
G1 - Business conduct | Potential risk from failing to ensure the operational resilience of the value chain by assessing vendors’ solvency, reputation and compliance with the law | Risk | Own operations | - Potential harm if risks materialize | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 4.4 Our suppliers
G1 - Business conduct | Risk stemming from improper conduct that makes illicit funds or assets appear legitimate and, therefore, facilitates illegal activity or benefits from it. | Risk | Own operations | - Potential harm if risks materialize | N/A | N/A | N/A | N/A | N/A | N/A | ✔ | 4.2 Ethical behaviour
1. For more information on time horizons, see section 1.3 Materiality assessment. 2. Own operations are the bank’s internal activities; Business relations primarily centre on upstream and downstream value chain activities.

85 The latest IEA's net-zero scenario was published in the World Energy Outlook in October 2024. The reference data for 2030 are 0.19 tCO 2/MWh in power (-58% vs. 2019),
23% reduction vs. 2019 in oil & gas (which implies 18.27 mtCO 2 applied to Santander baseline), 1.29 tCO 2 e/tS in steel (-18% vs. 2019), 60.59 gCO 2 e/RPK in aviation (-29% vs.
2019) and 116 gCO 2 /vkm in automotive (-40% vs. 2020). For own emission reduction reference data for 2030 is 104,400 ton (-42% vs. 2020).
86 From our total lending on the balance sheet, about 9% of our exposure comprises sectors for which Santander published emissions alignment targets for high-emitting
sectors (Power generation, oil and gas, aviation, steel, auto manufacturing and auto lending. Excluding the thermal-coal phase out) and around 18% of total CIB lending. Using
baselines exposures with different time horizons as per the above table, and balance sheet exposures as at December 2023. Our objectives and alignment targets have been
externally assured only in the verification process of the present report.
87 PCAF: “Partnership for Carbon Accounting Financials” is a global partnership of financial institutions that work together to develop and implement a harmonized approach to
assess and disclose the greenhouse gas (GHG) emissions associated with their loans and investments. Santander joined PCAF in 2021.
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SN 4. Our transition plan
i. Alignment targets details
Target types: To help our customers’ transition to a low-carbon
economy, we employ physical emissions intensity for setting
targets in the power generation, steel, aviation and auto sectors.
For the oil & gas sector, we choose the absolute emissions metric.
We prioritize engagement over divestment. We recognize that in
certain situations, establishing alignment targets may
inadvertently discourage the transition. For example, when they
increase their leverage to undertake significant capex programs to
align their operations, while the alignment benefits will only
materialise over the medium term. To prevent undesirable
outcomes like the one described, we evaluate each case
individually and base our decisions on a long-term perspective.
However, due to the absence of a widely accepted “transition
finance taxonomy”, we consider alignment targets to be an
effective tool for informing portfolio decisions, provided that each
case is managed individually. For the different targets’ design
choices taken, we considered inputs from several different internal
and external stakeholders.
Scenarios: 85 To set 2030 science-based alignment targets for our
financed sectors, we choose a credible scenario that draws a
pathway to reach net zero emissions by 2050 and will limit
temperature increase to 1.5 ºC in line with the Paris Agreement.
The scenario we have chosen for the sectors for which we have
released alignment targets is the “International Energy Agency -
Net Zero Emissions by 2050 Scenario” (IEA-NZE). Our aviation
target is consistent with the expected adoption of current
technologies. This scenario takes into account the technological,
regulatory and market changes that need to take place. Regarding
our scope 1 and 2 own emission reduction objective by 2030, it is
aligned with the cross-sector absolute reduction method
considered by SBTi, going beyond the minimum ambition of a
linear annual reduction of a 4.2% linear annual reduction between
the base year and target year.
Target coverage: 86 All CIB portfolio targets and metrics are global
and include our core subsidiaries. SCF's target is European and
includes its passenger car portfolio (including loans and leasing) in
16 units (13 countries in Europe). This is the same scope we use to
measure emissions performance and progress with our targets,
though we are working on obtaining information and tracking
emissions for other vehicle types.
Baseline years: We use 2019 as the baseline year for the four
initial sectors and 2020 and 2022 for auto manufacturing and auto
lending in Europe, respectively. We chose those years to be
representative of our portfolios at that time. For our own
operations emissions (Scopes 1 & 2) reduction objectives, we use
2020 as the baseline considering the deadline of the plan set to
2030, and the guidelines criteria for setting science-based targets.
Financed emissions: According to the methodology and design we
chose for each target we calculate financed emissions based on
PCAF 87. Since the emissions information of our customers or assets
financed is not available in the same way as their financial
information, there is a lag of at least one year in the emissions
data.
ii. Disclosed financed emissions
Santander discloses financed emissions from its loan portfolio for
different uses. In the context of portfolio alignment, we calculate
the financed emissions of the portfolios of the most relevant
sectors, following market standards and practices, focusing on the
parts of the value chain of each industry that are most polluting
and actionable through alignment strategies. For this purpose it is
necessary to use information to monitor alignment strategies and
their effectiveness.
Additionally, obligations arising from regulatory or supervisory
requirements need to cover financed emissions from wider
perimeters. For this, we also use other sources and methodologies,
including average emission factors per sector based on market-
recognised methodologies (such as PCAF).
We also calculate the financed emissions of our long-term
investments in equity and sovereign debt, which are material
exposures in our balance sheet.
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2. Financed emissions for alignment A
Sector | Year B | Exposure (drawn amount EUR bn)C | Emissions scope | Absolute emissions (mtCO 2 e) | Physical emissions intensity | Financial emissions intensity (mtCO 2 e/ EUR bn lent) | Overall PCAF score D
Power generation | 2020 | 10.31 | 1 | 4.59 | 0.17 tCO 2 e/MWh | 0.45 | 2.5
2021 | 10.23 | 4.24 | 0.19 tCO 2 e/MWh | 0.41 | 2.8
2022 | 11.88 | 3.82 | 0.16 tCO₂e/MWh | 0.32 | 3.0
2023 | 10.75 | 3.14 | 0.15 tCO₂e/MWh | 0.29 | 3.2
Oil & gas | 2020 | 6.67 | 1 + 2 + 3 E | 22.58 | 73.60 tCO 2 e/TJ | 3.38 | 3.6
2021 | 8.25 | 27.43 | 74.36 tCO 2 e/TJ | 3.33 | 3.9
2022 | 6.89 | 20.94 | 73.28 tCO₂e/TJ | 3.04 | 3.0
2023 | 6.82 | 20.27 | 72.97 tCO₂e/TJ | 2.97 | 3.0
Aviation | 2020 | 2.44 | 1 + 2 | 1.08 | 93.05 gCO 2 e/RPK | 0.44 | 3.7
2021 | 2.02 | 0.84 | 97.21 gCO 2 e/RPK | 0.42 | 3.2
2022 | 1.65 | 1.35 | 81.09 gCO₂e/RPK | 0.82 | 3.0
2023 | 0.70 | 0.58 | 82.99 gCO₂e/RPK | 0.83 | 3.0
Steel | 2020 | 1.31 | 1 + 2 | 2.14 | 1.40 tCO 2 e/tS | 1.63 | 3.1
2021 | 1.42 | 1.90 | 1.36 tCO 2 e/tS | 1.33 | 3.1
2022 | 1.96 | 1.88 | 1.24 tCO₂e/tS | 0.96 | 3.1
2023 | 2.04 | 1.84 | 1.38 tCO₂e/tS | 0.90 | 3.3
Auto - manufacturing | 2020 | 4.45 | 3 E | 3.49 | 149 gCO 2/vkm | 0.79 | 3.1
2021 | 3.90 | 2.67 | 138 gCO 2/vkm | 0.68 | 3.0
2022 | 3.95 | 2.74 | 133 gCO₂/vkm | 0.70 | 3.0
2023 | 4.02 | 2.74 | 134 gCO₂/vkm | 0.68 | 3.0
Agro F | 2022 | 1.80 | 1 + 2 | 6.20 | 7.04 tCO₂e/ton | 3.52 | 3.3
2023 | 3.58 | 9.83 | 6.59 tCO₂e/ton | 2.75 | 3.1
Auto - lending G | 2022 | 55.27 | 1 + 2 | 5.84 | 137 gCO 2 e/vkm | 0.11 | 3.2
2023 | 62.40 | 6.78 | 133 gCO₂e/vkm | 0.11 | 2.7
Mortgages H | 2022 | 211.05 | 1 + 2 | 2.63 | 39.72 kgCO 2 e/m 2 | 0.01 | 3.3
2023 | 262.45 | 1.93 | 21.06 kgCO₂e/m² | 0.01 | 3.5
Commercial Real Estate I | 2023 | 18.26 | 1+2 | 0.19 | 22.89 kgCO2e/m² | 0.01 | 4.0

A. These financed emissions should not be confused with the EBA Pillar 3 exercise financed emissions calculations, as the perimeter and therefore, supporting data of the two
exercises are different. In the case of corporate business loans, Banco Santander calculates the Total Value of the Company (used to obtain the emissions attribution factor)
by adding the total equity and debt of the company in order to avoid the high volatility in market capitalization.
B. Obtaining emissions data from our customers is a challenge. As they disclose more non-financial information worldwide, the quality of our reporting on finance emissions
will improve. In some other retail sectors, we rely on availability of emissions information for the different asset types as well as business information.
C. For power generation it i ncludes Corporates and Project Finance in operation.
D. Scores illustrate the data quality used to calculate the financed emissions (with 1 being the best). Financed emissions information comes from a wide range of sources for
emissions, physical intensity, and production data. For CIB portfolios CDP is the main source for GHG emissions and Trucost for fossil fuel production, we also used Asset
Impact and Annual Reports as secondary sources to cover information gaps. We rely on Transition Pathway Initiative to measure physical intensity for certain sectors, such as
Autos, O&G and Steel. In other retail sectors, we rely on the good quality of business information but also on data suppliers to improve and expand their emission databases.
E. Scope 3 - category 11: use of sold products.
F. Agriculture portfolio in Brazil. It includes financing for livestock (such as raising cattle for meat and dairy), agricultural activity (such as planting perennial and temporary crops
for soybeans, corn, rice, and vegetables) and land use change. Since there is no specific methodology for agriculture, the PCAF score was adapted considering the data
available in primary production portfolio that made possible to measure land management emissions. Financed emissions of the Brazil agriculture portfolio as of March
2022 and December 2023.
G. Consumer lending for the acquisition of passenger cars, covering a significant majority of the exposure in Europe.
H. Mortgage portfolio in the United Kingdom for 2022, and in the United Kingdom and Spain for 2023. Assessment includes Scope 1 and 2 emissions based on actual (where
available) and modelled EPC's.
I. Commercial real estate portfolios in the United Kingdom and Spain. Assessment includes Scope 1 and 2 emissions based on actual (where available) and modelled EPC's.
More detail regarding other financed emissions calculations from our balance sheet, see section SN 7.1 Green transition.
iii. Internal carbon pricing
Internal carbon pricing is a tool that helps internalize the external
costs of carbon emissions and align operations with broader
sustainability objectives. Setting an internal carbon price does not
appear to be the most appropriate approach for our type of
operations and core business model as we strive to help our
customers go green. Nonetheless, we do consider carbon pricing in
several of our internal review and assessment tools, such as
scenario analyses and transition risk calculations. These processes
reflect the "real world" costs in our prices. A “fictitious” internal
carbon price would cause disparity between the customer’s actual
ability to pay debt and internal valuations. We encourage the
88 Estimates of future GHG emissions that could arise during the useful life of a company’s key assets. The term “key assets” refers to existing or planned assets that a company
owns or controls (e.g. fixed or mobile installations and equipment) and that are direct or indirect energy-related sources of GHG emissions.
89 Estimates of future GHG emissions as the direct GHG emissions from the use of products sold throughout their useful life (category 3.11).
90 These are: 1) climate change mitigation; 2) climate change adaptation; 3) sustainable use and protection of water and marine resources; 4) transition to a circular economy;
5) pollution prevention and control and protection; and 6) restoration of biodiversity and ecosystems.
91 The CSRD applies to large companies, listed companies, banks, or insurance companies that meet certain criteria, such as having a balance sheet total greater than EUR 20
million, a turnover greater than EUR 40 million, or an average number of employees greater than 500 during the fiscal year.
92 Calculation for the two climate-related objectives. For the flow of volumes, the Green Asset Ratio is 2.6% (turnover-based) and 3.4% (CapEx-based).
93 Eligibility for the climate-related targets is 34.0% (based on both turnover and CapEx) and, for the remaining four targets, is 0.04% based on turnover and 0.03% based on
CapEx.
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creation of carbon prices in real economies to facilitate the
transition to a low-carbon economy.
Grupo Santander’s strategy to lessen the environmental impact of
our operations involves reducing CO 2 e emissions and offsetting the
emissions that we’re unable to reduce. We follow a strict carbon
credits selection process that includes due diligence on compliance
and consistency with our environmental, social and climate change
policy. Credits are certified under some of the industry's most well-
known standards. Moreover, the carbon credits we purchase are
ratified by an independent rating agency to validate their integrity.
We actively monitor the voluntary carbon credit market to adapt
our offsetting strategy to best practice.
Offsetting serves to internalize the cost of emissions (scopes 1 and
2) from our own operations.
iv. EU Paris-aligned benchmarks
Because of our financing and investment operations, Santander is
not excluded from the EU Paris-aligned benchmarks. These
benchmarks are designed to align investment with the Paris
Agreement’s goals and include undertakings that meet special
sustainability standards. They exclude undertakings that do not
meet those standards.
We disclose our exposure to undertakings excluded from those
benchmarks in section ‘10.4 Credit quality of exposures‘ of our
Pillar 3 disclosures report in accordance with points (d) to (g) of
Article 12(1) and (2) of Regulation (EU) 2020/1818.
v. Locked-in GHG emissions
Our double materiality assessment shows that our direct emissions
do not have a negative impact on, or pose material risk to, the
environment. Regarding locked-in GHG emissions from key
assets, 88 the nature of our financing and investment activity means
that none of our key assets are sources of scope 1 and 2 emissions.
Nonetheless, the Group takes carbon footprint reduction measures
to help make a positive contribution to the environment.
As detailed in the 2.4.5 ‘Our environmental footprint’ section
regarding indirect GHG emissions (scope 3), the only material
category under this scope was category 3.15 (financed emissions),
with a weighting of over 99% of the total scope 3 emissions.
Regarding locked-in GHG emissions from key products, 89 the
category Scope 3.11 “Use of sold products emissions” is not
material to the bank.
With regard to locked-in GHG emissions in category 3.15, there is
currently no information available to have a reliable estimation due
to lack of information from counterparties. In future exercises, its
evaluation will be assessed based on the availability of data.
SN 5. EU Taxonomy
Information on Article 8 of the EU Taxonomy
Regulation
In 2020, the European Union adopted the Taxonomy Regulation
that sets out a list of activities that can qualify as environmentally
sustainable 90 and stipulates that companies subject to the
Corporate Sustainability Reporting Directive (CSRD 91) must disclose
how their operations align with the EU Taxonomy.
→ GAR, financial institutions:
Financial institutions have been disclosing their Green Asset Ratio
(GAR) since 2023. This ratio measures the financing granted to
Taxonomy-aligned activities as the numerator and the total
balance sheet as the denominator.
To be considered aligned, activities must meet specific taxonomy
criteria and ensure that they do no significant harm (DNSH) to any
of the other environmental objectives and meet minimum social
safeguards (MSS).
Santander's GAR is 3.04% (turnover-based) 92
and 3.28% (CapEx-based)93
The European Taxonomy criteria do not reflect the full reality of
companies’ transition efforts. Many activities that contribute to the
transition to a greener economy do not meet the Taxonomy’s
alignment criteria. Thus, we cannot include them in the ratio (for
instance, certain types of hybrid cars, which, despite being an
undoubted improvement on petrol cars, are not admitted in all
cases).
Moreover, the limitations in the design of the ratio and in financial
institutions’ implementation of the Taxonomy lead to reduced
numbers:
• The numerator and denominator are not symmetric. While the
denominator reflects the balance sheet total, the numerator only
includes financing in relation to four portfolios: financial
institutions; non-financial institutions subject to the CSRD;
households (mortgages, auto and renovations); and local
governments. Thus, the numerator does not consider green loans
to SMEs or the majority of non-European entities.
94 For the asset management and insurer KPI, we included eligible and aligned transactions based on the eligibility and alignment ratios of counterparties (both in terms of
CapEx and turnover).
95 C/2024/6691
96 Eligibility for climate-related targets is 10.9% based on turnover and 10.6% based on CapEx. For the remaining four objectives, eligibility is 1.0% based on turnover and 0.5%
based on CapEx.
97 European Commission requirements dictate the disclosure of a KPI relating to investment and underwriting. Since the Group does not engage in underwriting relating to non-
life insurance (but only markets these products), we only disclose an investment KPI.
98 Eligibility for climate-related targets is 11.7% based on turnover and 12.4% based on CapEx. For the remaining four objectives, eligibility is 0.3% (based on both turnover and
CapEx).
99 As part of detailed analysis, we identified the companies under this activity and reviewed a significant volume of revenue derived from it. Following our review, we conclude
that this indicator is of little relevance to the Group's sustainability disclosures and, thus, decided not to publish the templates in this regard. Of the analysed revenue
samples, 80% comes from customers who are not required to disclose taxonomy information and, therefore, do not publish alignment information. For customers who do
publish taxonomy information, the percentage of aligned revenues of the total subject to this KPI is around 0.3%.
100 Based on turnover and CapEx, with weightings according to the proportion of revenue stemming from the activities covered by the corresponding KPI in their total turnover.
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• The available data is limited. In Latin America and even in
European countries such as Poland (key markets for the Group),
energy efficiency certificates are either non-existent or very
limited, which makes it impossible to account for aligned
mortgages in the ratio. There are also significant gaps in
companies’ alignment information.
• DNSH (do no significant harm) and MSS (minimum social
safeguards) implementation criteria are complex and in no way
reflect the reality of a bank. These criteria compel financial
institutions to collect evidence that shows the counterparty
meets certain standards for each transaction. This results in an
inability to include specific aligned financing (e.g. project finance)
in the numerator.
Based on a voluntary approach and to mitigate the first limitation
mentioned above, we complement disclosure, we complement the
GAR with an additional ratio (European and symmetric):
• The numerator follows the same criteria than the previous ratio
but only covers European exposures aligned with the Taxonomy.
• The denominator is symmetric and only includes portfolios
where we can currently label exposures as environmentally
sustainable: European financial and non-financial corporations
subject to the CSRD, households, and local governments. We
excluded (non-exhaustive list): Non-CSRD companies (since they
do not have reporting obligations), cash & interbank loans,
derivatives, goodwill and others.

(EUR million) | 2024 | 2023
GAR stock A | 3.04% | 2.42%
Taxonomy aligned activities | 39,656 | 31,142
Total GAR denominator | 1,306,542 | 1,288,300
European & Symmetric - GAR A | 7.90% | 6.09%
Taxonomy aligned activities | 39,287 | 30,037
Total GAR denominator | 497,604 | 493,167
A Turnover-based ratio

→ Other businesses’ GAR (asset management, insurance and
investment services):
In addition to the credit institutions GAR that has already been
published, we included the GAR for asset management, insurance 94
and investment services businesses according to the European
Commission's requirements 95
→ Our key performance indicator for asset management is 1.59%
(based on turnover) and 2.60% (based on CapEx). 96
→ Our key performance indicator for insurance 97 is 1.45% (based
on turnover) and 2.05% (based on CapEx). 98
→ Regarding the investment services KPI, we analysed the turnover
of the Group's companies in relation to the total, noting that it
accounts for less than 3% and is, therefore immaterial 99.
→ Consolidated KPI:
Last, per the European Commission's communiqué, we publish a
consolidated KPI of all businesses, calculated as the weighted
average of the applicable KPI of each business (credit institutions,
asset management, insurance and investment services) based on
turnover and CapEx, with weightings according to the proportion of
revenue stemming from the activities covered by the
corresponding KPI in their total turnover. 100
Our consolidated KPI is 2.99% (based on turnover) and 3.24%
(based on CapEx).
We considered net interest income and fees for the weighting of
the turnover-based KPI.
Please find the complete disclosure on the following pages,
including the templates set out in the Taxonomy Regulation.

| For more details on how our financial strategy, product design and relations with customers and counterparties comply with the EU Taxonomy, please see the sections 2. 'Supporting the green transition' and 10.9 'GFANZ transition planning' .

| For more details about GAR, please see the section "SN 7.2 EU taxonomy tables".

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SN 6. Sustainable finance and investment classification system (SFICS)
Sustainable finance is key to meeting our climate ambition. We
continue to build on our sustainable finance guidelines, which we
first published in February 2022, and that we continue updating
based on developments in regulation and market practice. Since
2024 it also includes socially responsible investment standards
and is now called the Sustainable finance and investment
classification system (SFICS).
The SFICS outlines common standards to consider an asset or
activity as environmental, social or sustainable in all the Group’s
units and businesses. It draws on such international market
guidelines, standards and principles as the EU Taxonomy (including
the four new environmental targets for 2023), ICMA (I nternational
Capital Market Association) Principles, LMA (Loan Market
Association) Principles, UNEP FI Framework and the Climate Bonds
Standard.
The SFICS enables us to track our sustainable activity, support
product development and mitigate greenwashing risk.
We updated the SFICS based on lessons
learned and market trends. It now features:

| A sustainability approach for customers that complements the activity-based approach.
| Additional details on manufacturing, real estate, sustainable agriculture and other activities.
| New activities that come to light on the back of developments in the EU Taxonomy and to cover new environmental goals related to water, waste, the circular economy and biodiversity.

We will continue working to evolve the SFICS in line with market
developments and business practice, to have a comprehensive set
of criteria that enables us to classify green and transition activities
to support our customers transition and contribute to our climate
ambition.

Internationally recognized sector principles and guidelines that the SFICS draws on
EU taxonomy | ICMA Green/ Social Bond Principles | LMA Green Loan Principles | LMA Sustainability Linked Loan Principles |  | ICMA Sustainability Linked Bond Principles | Febraban taxonomy (Brazil) | UNEP FI framework | Climate Bond Standards
Eligible products
Dedicated purpose |  | Sustainability-linked financing
→ Proceeds go towards eligible environmental and social activities and initiatives . → Eligibility criteria: Activities with a specific environmental and social purpose under accepted standards that follow internationally recognized sector guidelines and principles (ICMA, LMA, Climate Bonds Standard) and the EU taxonomy. |  | → Sustainability-linked transactions designed to help our customers achieve their ESG objectives. → Transaction structured to achieve pre-determined sustainability performance targets (ESG ratings and metrics). → Alignment with sector standards (ICMA and LMA).

Update in 2023 to the Green, social and
sustainability funding global framework

Updated in 2023, this framework is the reference for all
environmental, social and sustainability-labelled funding
instruments traded in sustainable capital markets and enables all
Grupo Santander entities to issue based on it. It replaces our
previous Global sustainable bond and Green bond frameworks.
Consistent with best market practice and investor expectations, it
covers use of proceeds, project assessment and selection,
management of proceeds and reporting in line with the
International Capital Market Association’s (ICMA) and Loan Market
Association’s (LMA) guidelines. It is also consistent with the SFICS.
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SN 7. Our progress in figures
SN 7.1 Green transition 135
Table 1. Green finance 135
Table 2. Environmental footprint 135
Table 3. Gross scopes 1, 2, 3 and total GHG emissions 136
Table 4. GHG mitigation projects financed through
carbon credits 138
Table 5 Equator principles 139
SN 7.2 EU taxonomy tables 140
SN 7.3 Employees 191
Table 6. Employees by region 191
Table 7. Employees by gender 191
Table 8. Employees by management group and gender 192
Table 9. Employees by age bracket 192
Table 10. Employees by employment contract 193
Table 11. Collective bargaining coverage
and social dialogue 193
Table 12. Turnover by region 193
Table 13. Average remuneration by management group,
gender and age bracket 194
Table 14. Remuneration ratios 194
Table 15. Average remuneration of senior management 194
Table 16. Average remuneration of senior
management linked to long-term objectives 194
Table 17. Senior management composition 195
Table 18. Training 195
Table 19. Hours of training by gender and management
group 195
Table 20. Occupational health and safety 195
SN 7.4 Customers 196
Table 21. Group customers 196
Table 22. Dialogue by channel 196
Table 23. NPS ranking by country 196
Table 24. Total complaints 197
SN 7.5 Financial inclusion 197
Table 25. People financially included 197
Table 26. Microfinance 197
SN 7.6 Community support 197
Table 27. Community support 197
Table 28. Outputs and outcomes 198
SN 7.7 Tax contribution 199
Table 29. Total taxes paid 199
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SN 7.1 Green transition

1. Green finance A
EUR bn | 2024 | 2023 | 2022 | 2021
Raised and facilitated | 24.1 | 20.9 | 28.8 | 31.9
Accumulated since 2019 | 139.4 | 115.3 | 94.5 | 65.7

A. From January to December 2024, CIB contributed EUR 24.1 billion to the green finance target. According to Infralogic, Bloomberg, Dealogic, TXF and Mergermarket league
tables. This refers to all roles undertaken by Banco Santander in the same project. It does not include financial inclusion and entrepreneurship. Green Finance raised and
facilitated is not a synonym of EU Taxonomy.

2. Environmental footprint A
| 2024 | 2023 | Var. 2024-2023 (%)
Consumption |  |  |
Total internal energy consumption (MWh) | 1,012,554 | - |
Total fossil energy consumption (MWh) | 179,258 | - |
Share of fossil sources in total energy consumption (%) | 17.7% | - |
Consumption from nuclear sources (MWh) | 6,457 | - |
Share of nuclear sources in total energy consumption (%) | 0.6% | - |
Total certified renewable energy consumption (MWh) | 793,136 | - |
Share of certified renewable sources in total energy consumption (%) | 78.3% | - |
Fuel consumption by renewable source, such as biomass (MWh) | 0 | - |
Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh) | 780,356 | - |
Consumption of self-generated non-fuel renewable energy (MWh) | 12,780 | - |
Total not certified renewable energy consumption (MWh) | 33,703 | - |
Share of not certified renewable sources in total energy consumption (%) | 3.3% | - |
Total electricity (millions of kwh) | 856.65 | 805.31 | 6.4
Electricity from non-renewable sources (millions of kwh) | 63.52 | 25.63 | 147.8
Electricity from renewable sources (millions of kwh) | 793.14 | 779.68 | 1.7
Percentage of contractual instruments (contracts for renewable electricity guaranteed by utility) used for the procurement of renewable electricity. | 53% |  |
Percentage of contractual instruments (PPAs_Power Purchase Agreements) used for the purchase of renewable electricity | 9% |  |
Percentage of contractual instruments (IRECs (International Renewable Electricity Certificates or DoO) used for the procurement of renewable electricity | 38% |  |
Water (m 3)B | 1,961,149 | 1,858,645 | 5.5
Paper (t) | 6,023 | 4,932 | 22.1
Recycled or certified paper (t) | 5,000 | 4,417 | 13.2

A. For 2024, information is included for 100% of the Group’s average employees in all the countries we operate. The entities listed under ESRS Requirement E1, paragraph 50.b)
(investees with operational control), are not material to Santander.
B. Santander consumes water basically from public water supply networks.
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3. Gross scopes 1, 2, 3 and total GHG emissions (excluding financed emissions)
| Retrospective | Milestones and target years I
| Base year (2020) G | Comparative (2023) H | N (2024) | % N / N-1 | 2025 | 2030 | 2050 | Annual Target % / Base Year
Scope 1 GHG emissions A,B |  |  |  |  |  |  |  |
Gross scope 1 GHG emissions (tCO 2 e) | 35,962 | 25,755 | 35,503 | 37.8% | - | 33,303 | - | 0.7%
Scope 2 GHG emissions A,C |  |  |  |  |  |  |  |
Gross location-based Scope 2 GHG emissions (tCO 2 e) | 297,621 | 205,292 | 194,276 | (5.4%) | - | 172,276 | - | 4.2%
Gross market-based Scope 2 GHG emissions (tCO 2 e) | 144,038 | 21,516 | 24,350 | 13.2% | - | 12,350 | - | 9.1%
Significant scope 3 GHG emissions D |  |  |  |  |  |  |  |
Total Gross indirect (Scope 3) GHG emissions (tCO 2 e) | - | 125,441 | 1,116,061 | - | - | - | - | -
1 Purchased goods and services E | - | - | 698,768 | - | - | - | - | -
2 Capital goods E | - | - | 216,388 | - | - | - | - | -
4 Upstream transportation and distribution E | - | - | 52,835 | - | - | - | - | -
6 Business travel A,F | - | 50,061 | 52,150 | 4.2% | - | - | - | -
7 Employee commuting A,F | - | 75,380 | 82,569 | 9.5% | - | - | - | -
9 Downstream transportation E | - | - | 13,350 | - | - | - | - | -
Total GHG emissions (excluding financed emissions)A,J |  |  |  |  |  |  |  |
Total GHG emissions (location-based) (tCO 2 e) | - | 356,488 | 1,345,841 | 277.5% | - | - | - | -
Total GHG emissions (market-based) (tCO 2 e) | - | 172,711 | 1,175,915 | 580.9% | - | - | - | -

A. For 2024, information is included for 100% of the Group’s average employees in all the countries we operate. The entities listed under ESRS Requirement E1, paragraph 50.b)
(investees with operational control), are not material to Santander.
B. These emissions include those derived from direct energy consumption: Natural gas, diesel as well as the fuel consumption of the fleets where it is applicable (Argentina,
Mexico, Brazil, Chile and Poland this year) and fugitive emissions of refrigerant gases according to the GHG Protocol standard. For the calculation of these emissions,
emission factors from DEFRA (Department for Environment, Food and Rural Affairs) 2024 for the financial year 2024 and DEFRA 2023 for the financial year 2023 have been
applied. For Brazil’s own fuels, the factors of the Brazilian GHG Protocol Program are used. Santander does not use biomass as fuel and therefore does not produce direct
biogenic emissions. Santander does not manage emissions subject to regulated Emission Trading Schemes (ETS), including the EU-ETS, national ETS and non-EU ETS. The
direct emissions in tCO 2 e disaggregated by country are: Argentina 1,554, Brazil 2,772, Chile 564, Germany 2,270, Mexico 6,609, Nordics 3, Poland 6,652, Portugal 231, Spain
5,995, UK 2,676, USA 5,109, Others 1,067.
C. These emissions include those derived from electricity consumption and the use of district heating and correspond to Scope 2 defined by the GHG Protocol standard. In 2024
they have been calculated with emission factors of the 2024 edition of the IEA, for 2023 the emission factors of the 2023 edition were used. For the calculation of district
heating in Poland and Norway, local public emission factors for 2024 different from DEFRA were used. Data on biogenic emissions is not included as information on these
emissions is not available in the EIA emission factor database.
◦ Indirect emissions Electricity – market-based: For the calculation of these emissions, only renewable electricity is considered as renewable electricity that can be certified
by any type of contract or product recognized as such, but not the share of the country energy mix obtained from IEA data (i.e. where non-renewable electricity is
purchased expressly).
◦ Indirect Emissions Electricity – location-based: The IEA emission factor for each country has been applied for all electricity purchased, regardless of its source of origin
(renewable or non-renewable).
The indirect emissions in tCO 2 e disaggregated by country are:
◦ Market-based: Argentina 441, Brazil 115, Chile 44, Germany 2,008, Mexico 1,613, Nordics 8, Poland 12,021, Portugal 309, Spain 1,371, UK 1,103, USA 0, Others 5,316.
◦ Location-based: Argentina 12,444, Brazil 17,577, Chile 7,350, Germany 5,824, Mexico 51,629, Nordics 36, Poland 26,826, Portugal 3,041, Spain 29,338, UK 16,408, USA
18,486, Others 5,316.
D. The assessment we conducted to determine the materiality of indirect GHG emissions (scope 3) found that the only material category under this scope was category 3.15
(financed emissions), with a weighting of 99% of the total.. The other categories are identified as not relevant, given its low representativeness. In addition, the categories
disclosed in this table are defined as relevant, and the following categories are identified as not relevant, given their low representativeness: 3.3 - Fuel and energy-related
activities (not included in Scope 1 or 2); 3.5 - waste generated in operations; 3.8 - upstream leased assets; 3.10 - processing of sold products; 3.11 - use of sold products;
3.12 - end-of-life treatment of sold products; 3.14 - franchises.
Biogenic emissions are not included as information on these emissions is not available in the databases we use to calculate any of the categories.
E. Supply chain emissions are calculated using a spend-based approach considering the payments to our suppliers in the current year. For that non primary data obtained from
suppliers has been used. These are calculated using the Supply Chain Greenhouse Gas Emission Factors v1.3 from the U.S. Environmental Protection Agency. Our supplier
taxonomies are mapped to the sectors considered in the database and then converted into emissions through spend-based emissions factors. Then, different spending
taxonomies are grouped based on the GHG scope 3 categories based on their nature (purchased goods and services, capital goods, upstream and downstream
transportation)
F. For the calculation of these emission factors DEFRA 2023 for fiscal year 2023 and DEFRA 2022 for fiscal year 2022 have been applied. For Brazil’s specific fuels, emissions
factors from the Brazilian GHG Protocol Program have been applied.
G. Base year is 2020. Emissions disclosed that year were reviewed to consider the same circumstances as the disclosed in this report 2024: equal perimeter (all countries and
businesses that have employees, formerly G10) and considering fugitive emissions equivalent to current emissions (recently included in emissions footprint).
H. Data with no information for 2023 are first reported in 2024.
I. Our reduction objectives have been externally assured only in the verification process of the present report.
J. To comply with the regulatory requirements we have extended the financed emissions calculations, in most cases based on factors and other proxies. More details see table
below 3.2. The total absolute financed emissions (scope 3, categories 15 and 13) of this broad scope, including scope 1, 2 and 3 are 283.8 mtCO 2 e. And the total GHG
emissions (market-based) are 285.0 mtCO 2 e. With this figure, the ratio of "GHG total emissions / Total income" is: 4.6 mtCO 2 e/bn€ (Total income figure as disclosed in the
Consolidated Income Statements).
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3.1. Financed emissions of non-financial corporations, as disclosed in Pillar 3
Sector | Gross carrying amount (€bn) | GHG financed emissions (scope 1 and scope 2 of the counterparty) (mtCO 2 e) | GHG financed emissions (scope 3 of the counterparty) (mtCO 2 e) | GHG emissions: gross carrying amount percentage of the portfolio derived from company-specific reporting
Exposures towards sectors that highly contribute to climate change A | 259.3 | 58.6 | 159.3 | 10.1%
A - Agriculture, forestry and fishing | 8.5 | 8.1 | 3.8 | 0.5%
B - Mining and quarrying | 11 | 11.8 | 41.5 | 28.2%
C - Manufacturing | 53.7 | 13.7 | 63.2 | 14.3%
D - Electricity, gas, steam and air conditioning supply | 13.9 | 10.7 | 7.2 | 23.6%
E - Water supply; sewerage, waste management and remediation activities | 1.7 | 1.1 | 0.5 | 3.8%
F - Construction | 18.7 | 0.9 | 4.8 | 2.7%
G - Wholesale and retail trade; repair of motor vehicles and motorcycles | 77.7 | 6.1 | 31 | 12.1%
H - Transportation and storage | 17.3 | 4.4 | 5.6 | 9.4%
I - Accommodation and food service activities | 11.3 | 0.5 | 1.4 | 1.3%
L - Real estate activities | 45.6 | 1.3 | 0.3 | 1.0%
Exposures towards sectors other than those that highly contribute to climate change A | 79.2 |  |  |
K - Financial and insurance activities | 0 |  |  |
Exposures to other sectors (NACE codes J, M - U) | 79.2 |  |  |
TOTAL | 338.5 | 58.6 | 159.3 | 7.8%

A. In accordance with the Commission delegated regulation EU) 2020/1818 supplementing regulation (EU) 2016/1011 as regards minimum standards for EU Climate
Transition Benchmarks and EU Paris-aligned Benchmarks -Climate Benchmark Standards Regulation - Recital 6: Sectors listed in Sections A to H and Section L of Annex I to
Regulation (EC) No 1893/2006.

3.2. Financed emissions estimated from balance sheet A
Asset | Gross carrying amount assessed (EUR bn) | GHG financed emissions (scope 1 and scope 2) (mtCO 2 e) | GHG Scope 1 and 2 mtCO 2 e/ exposure (EUR bn) | GHG financed emissions (scope 3) (mtCO 2 e) | GHG Scope 3 mtCO 2 e/ exposure (EUR bn) | PCAF Score I
Non-financial corporations (Pillar 3)B | 338.5 | 58.6 | 0.18 | 159.3 | 0.66 | 4.8
Mortgages c | 350.5 | 3.6 | 0.01 | 0.0 | 0.01 | 3.8
Motor vehicle loans D | 170.2 | 27.0 | 0.16 | 0.0 | 0.16 | 4.2
Sovereign debt E | 155.2 | 33.9 | 0.22 | 0.0 | 0.22 | 2.2
Corporate bonds F | 45.7 | 0.3 | 0.006 | 0.7 | 0.02 | 5.0
Equity instruments G | 6.8 | 0.01 | 0.002 | 0.1 | 0.01 | 5.0
Investments: joint ventures and associated H | 7.3 | 0.02 | 0.003 | 0.2 | 0.03 | 4.0
TOTAL | 1,065.6 | 123.5 | 0.12 | 160.3 | 0.27 |

A. This includes scope 3 - category 13 and 15 emissions for regulatory purposes.
B. These are the financed emissions reported under the EBA Pillar 3 exercise, which should not be confused with the portfolio alignment financed emissions, as the scope and
supporting data of the two exercises is different.
C. Mortgage financed emissions. Calculated as of 2023, for the UK and Spain, and as of 2024 for Poland. Also extending calculation to rest of group's mortgage portfolio (2024
data).
D Motor vehicle loans financed emissions from loans and leases. That includes the current auto-lending alignment target scope, calculated as of 2023, and other auto
exposures within EU consumer finance business and auto-lending in America, calculated with 2024 financial data.
E. Sovereign debt at fair value or amortized cost. Financed emissions calculated covers scope 1 including 'Land Use, Land-Use Change and Forestry' (LULUCF), following the
recommendations by PCAF methodology and using the United Nations Framework Convention on Climate Change (UNFCCC) official reported emissions factors from the
PCAF database.
F. Private fixed-income instruments at fair value or amortized cost, excluding the exposures included in the Pillar 3 reporting. Financed emissions calculated covers scope 1, 2
and 3 from the issuers, following the recommendations by PCAF methodology and using the emissions factors from the PCAF database.
G. Equity instruments at fair value, excluding the exposures included in the Pillar 3 reporting. Financed emissions calculated covers scope 1, 2 and 3 from the issuers, following
the recommendations by PCAF methodology and using the emissions factors from the PCAF database.
H. Investments in joint ventures and associated. Financed emissions calculated covers scope 1, 2 and 3 from the companies, following the recommendations by PCAF
methodology and using the emissions factors from the PCAF database.
I. As explained below, we had to extrapolate the emissions calculations for near 20% of the exposure assessed for 'Financed emissions estimated from balance sheet'. The PCAF
score is an approximation assuming the extrapolations account for PCAF score 5 (worse quality), and the rest is calculated following the PCAF standard recommendations.
Santander discloses for the first time financed emissions of new categories from our balance sheet in this annual report, and we extend the
scope from the emissions calculated with PCAF methodology to a broader scope to cover almost all balance sheet exposures subject to
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financed emissions calculations, with the only purpose of complying with the disclosure regulation. In the 'SN. 4 Our transition plan' we
disclose the financed emissions of portfolio alignment with reasonable quality of data, with the aim of managing our portfolios with
alignment purposes. In this section, we prioritize the completeness of the sustainability information disclosed. This means that the
calculations where primarily supported by emissions factors, proxies or approximations, instead of actual reported emissions, to extend the
calculation of financed emissions as reasonable as possible. This calculation helps us reach the figures we disclose, although we will
continue to work on improving the available data and calculations in the future.
For all these reasons, we could expect some volatility in the financed emissions disclosed as better information becomes available over time
or as some of the proxies/factors provided by external parties are updated.

4. GHG mitigation projects financed through carbon credits
Carbon credits cancelled and used for scopes 1+2 compensation | N (2024)
Total (tCO 2 e)A | 59,858
Share from removal projects B (%) | 15%
Share from reduction projects (%) | 85%
Share of projects validated by Verra’s VCS | 13%
Share of projects validated by Climate Action Reserve | 15%
Share of projects validated by Gold Standard | 72%
Share from projects within the EU (%) | —%
Share of carbon credits that qualify as corresponding adjustments (%)C | —%

A. Since emissions offsetting is done by country, the upward rounding of tCO 2 e means that the total amount of credits is slightly higher than the total sum of emissions.
B. In 2024, all GHG phase-out mitigation projects are nature-based (biogenic) solutions projects. Santander cancels all credits after purchase in the year. In 2024, 71,300 new
credits were acquired and cancelled: 16.5% validated by Climate Action Reserve (removal projects) and 83.5% validated by Gold Standard (reduction projects). The existing
contractual agreements Santander has in different countries will enable us to obtain 70.259 carbon credits between from now to 2073 year. Cancellation of such credits will
be based on the mitigation approach at the time.
C. It is reported 0% since Article 6 is not yet applicable.
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5. Equator Principles
Number of projects | Project Finance |  | Project Related Corporate Loans |  | Project-Related Refinance and Project-Related Acquisition for Project Finance
Category | A | B | C |  | A | B | C |  | A | B | C
TOTAL | 3 | 9 | 3 |  | 2 | 3 | 1 |  | 0 | 0 | 0
Sector |  |  |  |  |  |  |  |  |  |  |
Mining | 0 | 0 | 0 |  | 0 | 0 | 0 |  | 0 | 0 | 0
Infrastructure | 1 | 1 | 3 |  | 0 | 0 | 0 |  | 0 | 0 | 0
Oil & gas | 1 | 0 | 0 |  | 0 | 0 | 0 |  | 0 | 0 | 0
Power | 1 | 6 | 0 |  | 1 | 2 | 1 |  | 0 | 0 | 0
Others | 0 | 2 | 0 |  | 1 | 1 | 0 |  | 0 | 0 | 0
Region |  |  |  |  |  |  |  |  |  |  |
Americas | 1 | 2 | 0 |  | 1 | 2 | 0 |  | 0 | 0 | 0
Europe, Middle East & Africa | 2 | 7 | 3 |  | 1 | 0 | 1 |  | 0 | 0 | 0
Asia pacific | 0 | 0 | 0 |  | 0 | 1 | 0 |  | 0 | 0 | 0
Type |  |  |  |  |  |  |  |  |  |  |
Designated countries A | 2 | 9 | 3 |  | 0 | 2 | 1 |  | 0 | 0 | 0
Non-designated countries | 1 | 0 | 0 |  | 2 | 1 | 0 |  | 0 | 0 | 0
Independent review |  |  |  |  |  |  |  |  |  |  |
Yes | 3 | 8 | 1 |  | 2 | 2 | 0 |  | 0 | 0 | 0
No | 0 | 1 | 2 |  | 0 | 1 | 1 |  | 0 | 0 | 0

A. In accordance with the definition of designated countries included in the Equator Principles, with solid environmental and social governance, legislation and institutions to
protect their inhabitants and the environment.
Category A – Projects with potential significant adverse environmental and social risks and/or impacts that are diverse, irreversible or unprecedented;
Category B – Projects with potential limited adverse environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily
addressed through mitigation measures;
Category C – Projects with minimal or no adverse environmental and social risks and/or impacts.
101 Perimeter calculation for GAR, in accordance with the Commission Delegated Regulation (EU) 2021/2178, is based on the prudential consolidated group. In this context, the entities within the Santander Group are consolidated using the full consolidation
method, except for jointly controlled entities, which are proportionately consolidated. Companies that cannot be consolidated due to their activity are included using the equity method. The difference between the total assets of the public and prudential
perimeters is not significant. This difference is due to the exclusion of non-financial entities and the inclusion of multi-group and intergroup entities, in accordance with this consolidation criterion.
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SN 7.2 EU taxonomy tables 101
0. Summary of KPI to be disclosed by credit institutions under Article 8 Taxonomy Regulation - 2024

|  | Total environmentally sustainable assets (1) | KPI (3) | KPI (4) | % coverage (over total assets) (5) | % of assets excluded from the numerator of the GAR (Article 7.2 and 7.3 and Section 1.1.2. of Annex V) | % of assets excluded from the denominator of the GAR (Article 7.1 and Section 1.2.4 of Annex V)
Main KPI | Green asset ratio (GAR) stock | 39,656 | 3.04 | 3.28 | 69.8 | 34.0 | 30.2
|  | Total environmentally sustainable assets (2) | KPI | KPI | % coverage (over total assets) | % of assets excluded from the numerator of the GAR (Article 7.2 and 7.3 and Section 1.1.2. of Annex V) | % of assets excluded from the denominator of the GAR (Article 7.1 and Section 1.2.4 of Annex V)
Additional KPI | GAR (flow) | 7,862 | 2.63 | 3.35 | 65.9 | 40.7 | 34.1
| Trading book(6) |  |  |  |  |  |
| Financial guarantees | 249 | 1.47 | 3.46 |  |  |
| Assets under management | 2,047 | 1.3 | 2.14 |  |  |
| Fees and commissions income(6) |  |  |  |  |  |

(1) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 42,834 million.
(2) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 10,009 million for GAR flow, EUR 585 million for financial guarantees and EUR 3,360 million for assets under management .
(3) Based on the Turnover KPI of the counterparty.
(4) Based on the CapEx KPI of the counterparty.
(5) % of assets covered by the KPI over banks´ total assets.
(6) Fees and Commissions and Trading Book KPIs shall only apply starting 2026.

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0. Summary of KPI to be disclosed by credit institutions under Article 8 Taxonomy Regulation - 2023

|  | Total environmentally sustainable assets (1) | KPI (3) | KPI (4) | % coverage (over total assets) (5) | % of assets excluded from the numerator of the GAR (Article 7.2 and 7.3 and Section 1.1.2. of Annex V) | % of assets excluded from the denominator of the GAR (Article 7.1 and Section 1.2.4 of Annex V)
Main KPI | Green asset ratio (GAR) stock | 31,151 | 2.4 | 2.6 | 70.3 | 33.9 | 29.7
|  | Total environmentally sustainable assets (2) | KPI | KPI | % coverage (over total assets) | % of assets excluded from the numerator of the GAR (Article 7.2 and 7.3 and Section 1.1.2. of Annex V) | % of assets excluded from the denominator of the GAR (Article 7.1 and Section 1.2.4 of Annex V)
Additional KPIs | GAR (flow) | 7,079 | 1.6 | 1.9 | 50.6 | 36.0 | 49.4
| Trading book(6) |  |  |  |  |  |
| Financial guarantees | 142 | 0.9 | 1.8 |  |  |
| Assets under management | 829 | 0.6 | 1.1 |  |  |
| Fees and commissions income(6) |  |  |  |  |  |

(1) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 33,422 million
(2) Total environmentally sustainable assets used for turnover KPI. Total environmentally sustainable assets used for Capex KPI amounts to EUR 8,435 million for GAR flow, EUR 289 million for financial guarantees and EUR 1,550 million for assets under management
(3) Based on the Turnover KPI of the counterparty
(4) Based on the CapEx KPI of the counterparty
(5) % of assets covered by the KPI over banks´ total assets
(6) Fees and Commissions and Trading Book KPIs shall only apply starting 2026

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1. Assets for the calculation of GAR (Capex) - 2024

Million EUR | 2024
| Climate Change Mitigation (CCM) |  | Climate Change Adaptation (CCA) |  | TOTAL (CCM + CCA)
Total [gross] carrying amount | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible)
| Of which environmentally sustainable (Taxonomy- aligned) |  |  | Of which environmentally sustainable (Taxonomy-aligned) |  |  | Of which environmentally sustainable (Taxonomy- aligned)
|  | Of which Use of Proceeds | Of which transitional | Of which enabling |  |  |  | Of which Use of Proceeds | Of which enabling |  |  |  | Of which Use of Proceeds | Of which transitional | Of which enabling
| GAR - Covered assets in both numerator and denominator |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 | Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation | 664,610 | 447,158 | 42,818 | 36,969 | 9,508 | 2,202 |  | 101 | 17 | 0 | 3 |  | 447,259 | 42,834 | 36,969 | 9,508 | 2,206
2 | Financial undertakings | 25,544 | 5,704 | 1,600 | 0 | 28 | 432 |  | 27 | 2 | 0 | 0 |  | 5,732 | 1,602 | 0 | 28 | 432
3 | Credit institutions | 18,208 | 3,332 | 312 | 0 | 1 | 12 |  | 24 | 2 | 0 | 0 |  | 3,356 | 314 | 0 | 1 | 12
4 | Loans and advances | 16,848 | 3,097 | 293 | 0 | 1 | 12 |  | 11 | 2 | 0 | 0 |  | 3,108 | 295 | 0 | 1 | 12
5 | Debt securities, including UoP (Use of Proceeds) | 1,360 | 235 | 19 | 0 | 0 | 0 |  | 13 | 0 | 0 | 0 |  | 248 | 19 | 0 | 0 | 0
6 | Equity instruments | 0 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
7 | Other financial corporations | 7,336 | 2,372 | 1,288 | 0 | 28 | 420 |  | 4 | 0 | 0 | 0 |  | 2,376 | 1,289 | 0 | 28 | 420
8 | of which investment firms | 2,300 | 975 | 878 | 0 | 0 | 233 |  | 0 | 0 | 0 | 0 |  | 975 | 878 | 0 | 0 | 233
9 | Loans and advances | 1,778 | 528 | 439 | 0 | 0 | 136 |  | 0 | 0 | 0 | 0 |  | 528 | 439 | 0 | 0 | 136
10 | Debt securities, including UoP | 523 | 447 | 439 | 0 | 0 | 98 |  | 0 | 0 | 0 | 0 |  | 447 | 439 | 0 | 0 | 98
11 | Equity instruments | 0 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
12 | of which management companies | 258 | 101 | 8 | 0 | 0 | 5 |  | 0 | 0 | 0 | 0 |  | 102 | 8 | 0 | 0 | 5
13 | Loans and advances | 176 | 61 | 3 | 0 | 0 | 3 |  | 0 | 0 | 0 | 0 |  | 61 | 3 | 0 | 0 | 3
14 | Debt securities, including UoP | 80 | 41 | 5 | 0 | 0 | 2 |  | 0 | 0 | 0 | 0 |  | 41 | 5 | 0 | 0 | 2
15 | Equity instruments | 2 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
16 | of which insurance undertakings | 2,050 | 246 | 9 | 0 | 0 | 0 |  | 2 | 0 | 0 | 0 |  | 247 | 9 | 0 | 0 | 0
17 | Loans and advances | 1,931 | 246 | 9 | 0 | 0 | 0 |  | 2 | 0 | 0 | 0 |  | 247 | 9 | 0 | 0 | 0
18 | Debt securities, including UoP | 0 | 0 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 | 0
19 | Equity instruments | 119 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
20 | Non-financial undertakings | 28,232 | 11,539 | 4,248 | 0 | 648 | 1,771 |  | 73 | 15 | 0 | 3 |  | 11,612 | 4,263 | 0 | 648 | 1,774
21 | Loans and advances | 26,333 | 10,918 | 3,827 | 0 | 646 | 1,508 |  | 65 | 6 | 0 | 3 |  | 10,983 | 3,833 | 0 | 646 | 1,511
22 | Debt securities, including UoP | 1,891 | 620 | 420 | 0 | 1 | 262 |  | 8 | 8 | 0 | 1 |  | 628 | 428 | 0 | 1 | 263
23 | Equity instruments | 8 | 1 | 1 |  | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 1 | 1 |  | 0 | 0
24 | Households | 609,668 | 428,942 | 36,969 | 36,969 | 8,832 | 0 |  | 0 | 0 | 0 | 0 |  | 428,942 | 36,969 | 36,969 | 8,832 | 0
25 | of which loans collateralised by residential immovable property | 362,813 | 331,277 | 28,137 | 28,137 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 331,277 | 28,137 | 28,137 | 0 | 0
26 | of which building renovation loans | 1,189 | 1,189 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 1,189 | 0 | 0 | 0 | 0
27 | of which motor vehicle loans | 96,477 | 96,477 | 8,832 | 8,832 | 8,832 | 0 |  |  |  |  |  |  | 96,477 | 8,832 | 8,832 | 8,832 | 0

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Million EUR | 2024
| Climate Change Mitigation (CCM) |  | Climate Change Adaptation (CCA) |  | TOTAL (CCM + CCA)
Total [gross] carrying amount | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible)
| Of which environmentally sustainable (Taxonomy- aligned) |  |  | Of which environmentally sustainable (Taxonomy-aligned) |  |  | Of which environmentally sustainable (Taxonomy- aligned)
|  | Of which Use of Proceeds | Of which transitional | Of which enabling |  |  |  | Of which Use of Proceeds | Of which enabling |  |  |  | Of which Use of Proceeds | Of which transitional | Of which enabling
28 | Local governments financing | 1,166 | 973 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 973 | 0 | 0 | 0 | 0
29 | Housing financing | 155 | 153 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 153 | 0 | 0 | 0 | 0
30 | Other local government financing | 1,012 | 819 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 819 | 0 | 0 | 0 | 0
31 | Collateral obtained by taking possession: residential and commercial immovable properties | 4,825 | 0 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 | 0
32 | Assets excluded from the numerator for GAR calculation (covered in the denominator) | 637,106 | 0 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 | 0
33 | Financial and Non-financial undertakings | 438,149 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
34 | SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations | 134,206 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
35 | Loans and advances | 132,387 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
36 | of which loans collateralised by commercial immovable property | 23,620 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
37 | of which building renovation loans | 1,704 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
38 | Debt securities | 1,575 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
39 | Equity instruments | 244 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
40 | Non-EU country counterparties not subject to NFRD disclosure obligations | 303,944 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
41 | Loans and advances | 276,247 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
42 | Debt securities | 24,306 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
43 | Equity instruments | 3,391 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
44 | Derivatives | 5,772 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
45 | On demand interbank loans | 12,146 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
46 | Cash and cash-related assets | 9,252 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
47 | Other categories of assets (e.g. Goodwill, commodities etc.) | 171,788 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
48 | Total GAR assets | 1,306,542 | 447,158 | 42,818 | 36,969 | 9,508 | 2,202 |  | 101 | 17 | 0 | 3 |  | 447,259 | 42,834 | 36,969 | 9,508 | 2,206
49 | Assets not covered for GAR calculation | 565,848 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
50 | Central governments and Supranational issuers | 142,309 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
51 | Central banks exposure | 193,354 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

102 The assets under management taken into account in this template covers the whole Group.
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Million EUR | 2024
| Climate Change Mitigation (CCM) |  | Climate Change Adaptation (CCA) |  | TOTAL (CCM + CCA)
Total [gross] carrying amount | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible)
| Of which environmentally sustainable (Taxonomy- aligned) |  |  | Of which environmentally sustainable (Taxonomy-aligned) |  |  | Of which environmentally sustainable (Taxonomy- aligned)
|  | Of which Use of Proceeds | Of which transitional | Of which enabling |  |  |  | Of which Use of Proceeds | Of which enabling |  |  |  | Of which Use of Proceeds | Of which transitional | Of which enabling
52 | Trading book | 230,185 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
53 | Total assets | 1,872,390 | 447,158 | 42,818 | 36,969 | 9,508 | 2,202 |  | 101 | 17 | 0 | 3 |  | 447,259 | 42,834 | 36,969 | 9,508 | 2,206
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54 | Financial guarantees | 16,898 | 1,282 | 570 | 0 | 47 | 387 |  | 39 | 15 | 0 | 4 |  | 1,320 | 585 | 0 | 47 | 390
55 | Assets under management 102 | 156,908 | 13,238 | 3,345 | 0 | 184 | 1,419 |  | 348 | 15 | 0 | 1 |  | 13,586 | 3,360 | 0 | 184 | 1,420
56 | Of which debt securities | 71,062 | 8,288 | 1,665 | 0 | 96 | 752 |  | 292 | 2 | 0 | 0 |  | 8,580 | 1,668 | 0 | 96 | 752
57 | Of which equity instruments | 63,320 | 4,744 | 1,616 | 0 | 86 | 642 |  | 54 | 12 | 0 | 1 |  | 4,798 | 1,628 | 0 | 86 | 643

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1. Assets for the calculation of GAR (Turnover) - 2024

Million EUR | 2024
| Climate Change Mitigation (CCM) |  | Climate Change Adaptation (CCA) |  | TOTAL (CCM + CCA)
Total [gross] carrying amount | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible)
| Of which environmentally sustainable (Taxonomy- aligned) |  |  | Of which environmentally sustainable (Taxonomy-aligned) |  |  | Of which environmentally sustainable (Taxonomy- aligned)
|  | Of which Use of Proceeds | Of which transitional | Of which enabling |  |  |  | Of which Use of Proceeds | Of which enabling |  |  |  | Of which Use of Proceeds | Of which transitional | Of which enabling
| GAR - Covered assets in both numerator and denominator |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 | Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation | 664,610 | 444,137 | 39,615 | 36,969 | 8,952 | 1,412 |  | 365 | 41 | 0 | 18 |  | 444,503 | 39,656 | 36,969 | 8,952 | 1,431
2 | Financial undertakings | 25,544 | 4,921 | 776 | 0 | 3 | 280 |  | 289 | 21 | 0 | 2 |  | 5,210 | 798 | 0 | 3 | 281
3 | Credit institutions | 18,208 | 3,265 | 280 | 0 | 0 | 5 |  | 25 | 2 | 0 | 0 |  | 3,290 | 281 | 0 | 0 | 5
4 | Loans and advances | 16,848 | 3,028 | 260 | 0 | 0 | 5 |  | 12 | 2 | 0 | 0 |  | 3,040 | 262 | 0 | 0 | 5
5 | Debt securities, including UoP | 1,360 | 237 | 19 | 0 | 0 | 0 |  | 13 | 0 | 0 | 0 |  | 250 | 19 | 0 | 0 | 0
6 | Equity instruments | 0 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
7 | Other financial corporations | 7,336 | 1,656 | 497 | 0 | 2 | 274 |  | 264 | 20 | 0 | 2 |  | 1,919 | 516 | 0 | 2 | 276
8 | of which investment firms | 2,300 | 392 | 263 | 0 | 0 | 141 |  | 43 | 4 | 0 | 2 |  | 435 | 268 | 0 | 0 | 143
9 | Loans and advances | 1,778 | 174 | 68 | 0 | 0 | 47 |  | 43 | 4 | 0 | 2 |  | 217 | 72 | 0 | 0 | 49
10 | Debt securities, including UoP | 523 | 218 | 196 | 0 | 0 | 94 |  | 0 | 0 | 0 | 0 |  | 218 | 196 | 0 | 0 | 94
11 | Equity instruments | 0 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
12 | of which management companies | 258 | 122 | 6 | 0 | 0 | 4 |  | 0 | 0 | 0 | 0 |  | 122 | 6 | 0 | 0 | 4
13 | Loans and advances | 176 | 120 | 6 | 0 | 0 | 4 |  | 0 | 0 | 0 | 0 |  | 121 | 6 | 0 | 0 | 4
14 | Debt securities, including UoP | 80 | 1 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 1 | 0 | 0 | 0 | 0
15 | Equity instruments | 2 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
16 | of which insurance undertakings | 2,050 | 244 | 7 | 0 | 0 | 0 |  | 219 | 15 | 0 | 0 |  | 462 | 22 | 0 | 0 | 0
17 | Loans and advances | 1,931 | 244 | 7 | 0 | 0 | 0 |  | 219 | 15 | 0 | 0 |  | 462 | 22 | 0 | 0 | 0
18 | Debt securities, including UoP | 0 | 0 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 | 0
19 | Equity instruments | 119 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
20 | Non-financial undertakings | 28,232 | 9,302 | 1,869 | 0 | 117 | 1,133 |  | 76 | 20 | 0 | 17 |  | 9,378 | 1,889 | 0 | 117 | 1,149
21 | Loans and advances | 26,333 | 9,014 | 1,648 | 0 | 117 | 936 |  | 70 | 16 | 0 | 16 |  | 9,084 | 1,664 | 0 | 117 | 952
22 | Debt securities, including UoP | 1,891 | 288 | 221 | 0 | 0 | 197 |  | 7 | 3 | 0 | 0 |  | 294 | 224 | 0 | 0 | 197
23 | Equity instruments | 8 | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 |  | 0 | 0 |  | 0 | 0
24 | Households | 609,668 | 428,942 | 36,969 | 36,969 | 8,832 | 0 |  | 0 | 0 | 0 | 0 |  | 428,942 | 36,969 | 36,969 | 8,832 | 0
25 | of which loans collateralised by residential immovable property | 362,813 | 331,277 | 28,137 | 28,137 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 331,277 | 28,137 | 28,137 | 0 | 0
26 | of which building renovation loans | 1,189 | 1,189 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 1,189 | 0 | 0 | 0 | 0
27 | of which motor vehicle loans | 96,477 | 96,477 | 8,832 | 8,832 | 8,832 | 0 |  |  |  |  |  |  | 96,477 | 8,832 | 8,832 | 8,832 | 0
28 | Local governments financing | 1,166 | 973 | 0 | 0 | 0 | 0 |  | 0 | 0 | 0 | 0 |  | 973 | 0 | 0 | 0 | 0

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Million EUR | 2024
| Climate Change Mitigation (CCM) |  | Climate Change Adaptation (CCA) |  | TOTAL (CCM + CCA)
Total [gross] carrying amount | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible) |  | Of which towards taxonomy relevant sectors (Taxonomy-eligible)
| Of which environmentally sustainable (Taxonomy- aligned) |  |  | Of which environmentally sustainable (Taxonomy-aligned) |  |  | Of which environmentally sustainable (Taxonomy- aligned)
|  | Of which Use of Proceeds | Of which transitional | Of which enabling |  |  |  | Of which Use of Proceeds