TCFD Report 2021
Looking to the future
Responsible banking at the heart 
of a sustainable economy

TCFD Report 2021 
table of contents
Introduction......................................................................................................3
Climate change......................................................................................................................................................3
Banks and the climate..........................................................................................................................................3
Corporate governance......................................................................................5
Strategy.............................................................................................................7
Our climate ambitions..........................................................................................................................................7
Towards a climate-neutral bank..........................................................................................................................7
Scenario analysis...................................................................................................................................................8
Climate risks and opportunities...........................................................................................................................9
Results of the analysis of the risks’ impact on the bank................................................................................10
Climate opportunities.........................................................................................................................................13
Risk management.......................................................................................... 14
Analysis of risks by sector...................................................................................................................................14
Risk exposure.......................................................................................................................................................16
Risk management policies and procedures.....................................................................................................17
Metrics and targets....................................................................................... 18
Methodology................................................................................................. 21
Task Force on Climate-related Financial Disclosures (TCFD).........................................................................21
Scenario analysis.................................................................................................................................................22
Selected sectors and risk assessment method...............................................................................................23
Sectoral risk analysis method............................................................................................................................24
Method and scope for calculating the carbon footprint.................................................................................24
Table with references to TCFD recommendations..........................................................................................26
TCFD Report 2021  •  2  |  27
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology

Introduction
Climate change
Climate change has consequences for the planet and 
the environment, as well as for the economy and the financial 
system. In response to these risks and to take the necessary 
steps to mitigate them, the world’s governments have 
decided to make a concerted effort to limit the progressive 
rise in temperatures and to mitigate the effects of climate 
change. As a consequence of these efforts, expectations 
have risen for the private sector committed to the climate 
transition through tightening regulation.
In December 2015, 197 countries signed the Paris 
Agreement, an international agreement that aims to limit 
the increase in global average temperature to well below 
2°C relative to pre-industrial levels and aims to maintain 
an increase of only 1.5°C. The structure of the Paris 
Agreement consists of legally binding targets for limiting 
the increase in the Earth’s average temperature, as well as 
the obligations of the parties to the agreement, of which 
the contributions of individual countries are the most 
important. Underpinning the broad climate action is 
the assumption that halting the rise in global temperatures 
will require significant reductions in greenhouse gas (GHG) 
emissions on a global scale. While the responsibility 
for achieving the agreement’s goals rests with national 
governments and drives changes in the area of development 
policies (e.g. the European Green Deal package), the Paris 
Agreement has also become a driver for private sector 
business initiatives.
These initiatives are particularly important in light 
of the conclusions of the Sixth Assessment Report of the IPCC 
– the Intergovernmental Panel on Climate Change. The IPCC 
leaves no doubt that climate change is likely to affect 
the stability of the entire economy. The effects of global 
temperature increases are already more severe and more 
widespread than expected. Moreover, some further effects 
of climate change are inevitable in the short term – emission 
trends and greenhouse gases present in the atmosphere will 
mean that we will feel some of the effects of climate change 
by 2040, even in the event of sudden decarbonisation. 
For this reason, adaptation will play an extremely important 
role, but this will not solve all challenges in climate-sensitive 
countries and ecosystems. Efforts to reduce emissions now 
are therefore crucial.
Both the IPCC and the signatories to the Paris Agreement 
recognise the importance of the measures indicated in terms 
of economic and financial sector stability. The potential 
economic losses as a result of rising global temperatures as 
well as the intensification of severe weather events (e.g. more 
frequent storms or droughts) must be taken into account. 
According to the IPCC, droughts, extreme heat and floods 
threaten water and food security, as well as the livelihoods 
of millions of people. The materialisation of such risks can 
furthermore cause volatility in natural resource and property 
markets and lead to the insolvency of some borrowers. 
Increasingly ambitious climate policies, regulations, financial 
market sentiment and social responsibility expectations 
towards businesses are not negligible and result in a decrease 
in the profitability of certain investments and an increase in 
the cost of carbon-intensive activities. In order to maintain 
financial stability during the transition to a low-carbon 
economy, it will be crucial in the coming years for climate risks 
to be properly managed not only by high-carbon companies, 
but also by financial institutions.
Banks and the climate
Until recently, the main burden of climate action has been 
placed on, among others, the enterprises that contribute 
most to the economy’s CO2 emissions. Now, there is 
increasing pressure from the European Commission, 
whose ambition is to encourage, through regulatory and 
non-regulatory measures, the linking of funds for new 
investments to climate indicators in the concept of so-called 
Sustainable Finance.
In this context, financial institutions have a uniquely 
important role to play in the transition to a low-
carbon economy because of their systemic importance 
for the economy as a whole. Indeed, banks contribute to 
greenhouse gas emissions through their own operations 
(e.g. energy consumption in buildings) and through 
the investments and loans they finance.
Although the direct impact of financial institutions’ actions 
in the area of climate change mitigation and adaptation is 
small, they can have an indirect impact through large capital 
commitments in sectors particularly exposed to physical and 
transformational risks.
TCFD Report 2021  •  3  |  27
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology

Banks therefore have the tools at their disposal to both 
support the transition towards a low-carbon economy and 
contribute to the European Commission’s declared objectives. 
They can do this by progressively reducing the environmental 
impact of their funding, including by steadily raising 
awareness among their customers and the general 
public of the importance of climate change and its impact 
on the economy, and gradually reducing their carbon-based 
portfolios. At the same time, banks can drive decarbonisation 
investments, particularly in hard-to-decarbonise sectors, 
supporting their transition to a low-carbon economy.
It is particularly important to integrate existing risk 
assessment policies and procedures with the climate 
area in investment and loan financing decisions and to 
link the bank’s strategy to ESG (Environmental, Social, 
Governance) elements.
This report presents the approach to the area of climate 
issue management at Santander Bank Polska S.A.. It is made 
up of four main chapters, presenting the bank’s corporate 
structures and reporting issues, the main assumptions 
of the strategy and actions in the area of mitigation as 
well as adaptation to climate change, the management 
processes together with the results of the climate risks and 
opportunities analysis carried out this year and information 
on our carbon footprint. This report is an important step 
both in terms of its integration with the Santander Group’s 
global strategy and activities, as well as the ongoing 
transparency regarding our activities in Poland. The report 
has been prepared in accordance with the recommendations 
of the Task Force on Climate-related Financial Disclosures 
(TCFD).
TCFD Report 2021  •  4  |  27
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology

Corporate governance
[GRI: 3-3]  
[TCFD: KE/TCFD]
Activities in the area of climate risk management and 
making appropriate steps to take advantage of opportunities 
are the responsibility of the Management Board as 
well as the Supervisory Board. These bodies support 
the risk management strategies by accepting key policies, 
participating in supporting committees, reviewing and 
accepting risks and reports.
The Management Board is responsible for setting our mission 
and long-term action plans, including the climate strategy and 
its main objectives. In making its decisions, the Management 
Board takes into account the assessments, information 
and analyses of the unit responsible for risk management, 
on the basis of which it adopts the ”Risk Appetite Statement”. 
The level of acceptable risk (”risk appetite”) is then approved 
by the Supervisory Board. Based on the defined limits, 
observation1 limits are set and risk management policies are 
constructed. In addition, the member of the Management 
Board responsible for risk management provides 
the Supervisory Board with relevant risk information in order 
to create a complete risk profile of the bank and to make 
appropriate decisions in this respect.
The Supervisory Board’s remit is, among other things, 
to review the bank’s overall management strategy 
and risk management strategy, also with a view to 
the long-term interests of the bank. In making its 
decisions, the Management Board also takes into account 
the assessments, information and analyses of the unit 
responsible for risk management.
In addition, the bank has a Responsible Banking and 
Organisational Culture Committee, which supports 
the bank’s Management Board in fulfilling its supervisory 
responsibilities with regard to the responsible business 
strategy and sustainable development at the company 
and Santander Bank Polska Group levels. The CEO is also 
the Committee Chairman and his responsibilities include 
defining the strategy and annual objectives in the field 
of responsible banking and corporate culture and ensuring 
the implementation of the provisions of Santander Bank 
Polska S.A.’s socio-environmental policies. This Committee is 
One of the bank’s most important units in the area 
of climate risk management is the Risk Committee, 
which is involved in the process of identifying climate 
risks and opportunities. The process was also carried 
out for the purpose of this report.
In the Risk Management Division, the function 
of Environmental &Social Risk Manager (ESRM) was 
established two years ago. The manager is responsible 
for carrying out individual risk assessments, in particular 
for entities operating in sectors such as oil and gas, power 
generation and transmission, mining and metals, soft 
commodities, and making ESRM recommendations (positive, 
conditionally positive or negative) for clients or transactions 
in the Corporate and Investment Banking (SCIB) segment. 
Credit partners are required to verify that the socio-
environmental risk analysis has been carried out and that 
the obligatory ESRM recommendation has been included in 
the credit application.
In addition, an Environmental and Social Risk Analysis 
procedure was implemented in June 2021 for customers in 
the Business and Corporate Banking (BCB) segment. As part 
of this process, an automated algorithm has been applied to 
a large extent, allowing for the preselection of environmental 
and social risks, as a result of which customers receive 
statuses regarding the level of these risks, so-called 
”environmental flags”. ”Environmental flags” are assigned 
to all clients as part of a portfolio pre-selection, carried out 
on the basis of individual company characteristics (including 
an assessment of their PAC). There are four types of flags: 
one is temporary (”For Verification”) and three are final 
(”Positive Verification”, ”Elevated Risk”, ”Prohibited Activity”).
supported by the ESG Forum, which is tasked with planning 
ESG activities, coordinating their implementation in the bank, 
and reporting periodically to the Responsible Banking and 
Corporate Culture Committee and the bank’s Management 
Board. Members of the ESG Forum include senior managers 
representing all divisions.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  5  |  27

The first flag means that additional individual analysis by the banker is required, the other three do not 
require any additional action but affect the loan process:
	
●”Positive Verification” implies a standard credit process;
	
●”Prohibited Activities” (e.g. coal mines, new coal 
power customers, wholesale of tropical timber, if not 
FSC certified) means that financing is not possible; 
for existing commitments in the portfolio, extension 
up to 12 months is possible with a gradual exposure 
reduction schedule;
	
●”Elevated Risk” – new commitments or upgrades are 
not recommended; renewals are possible.
The Risk Intelligence Department in the Risk Management 
Division is responsible for executing this process.
Notwithstanding the above, any issues with the potential 
to adversely affect reputational risk (including restricted 
activities) require consultation with the Compliance Area, 
PR Department and the Sustainability and ESG team.
In addition, the bank has a Work Environment 
Management Department that coordinates the purchase 
of certificates as part of carbon offsetting activities.
The following graph shows the Santander Bank Polska 
S.A.’s units responsible for climate risk management.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  6  |  27

Towards a climate-neutral bank
[TCFD: KE/TCFD]
As Santander Bank Polska S.A., we support the objectives of  
the global Net Zero strategy through a two-pronged approach:
Firstly, we are making efforts to reduce greenhouse gas 
emissions from our internal emission sources, such as 
electricity consumption, business travel or fleet operations.
Secondly, in line with the TCFD’s recommendations, we are 
focusing on emissions resulting from our financing, including 
lending, advisory and investment services provided to 
customers from all segments. In this way, we want to reduce 
indirect greenhouse gas emissions in our value chain – from 
suppliers to end users, i.e. for example the service recipients 
of our business and corporate clients. The key in this context 
will be to provide sustainable finance and offer investment 
advice in line with the Paris Agreement.
Our actions towards clients in the climate area, reducing 
the bank’s exposure to climate risks, have so far been as follows:
In 2019, we waived financing for new thermal coal mines and 
new thermal coal power units.
As of 2020 onwards, all the bank’s contracts with entities 
that use coal contain clauses prohibiting the application 
of the financing granted for coal mining and production 
purposes.
At the same time, we support our clients in achieving 
their business goals and also help them to meet their 
environmental and climate change regulatory obligations.
Strategy
[GRI: Custom indicator (Description of the bank’s approach to integrating 
the requirements of the ESG regulations into its business strategy)]  
[TCFD: KE/TCFD]
[PRB: 1 Alignment, 2 Impact] 
[ESG: E – Environment]
As one of the largest banks in Poland, we are aware of our 
role in the transformation of the Polish economy and 
the importance that our actions, policies and financing 
will have on this process. The Santander Group’s recently 
announced global Net Zero strategy is a confirmation of this – 
we have set ourselves the goal of achieving climate neutrality 
by 2050. Furthermore, tackling the effects of climate change 
is an overarching goal of ‘green banking’, our Responsible 
Banking strategy pillar.
Globally, the Santander Group is also a founding member 
of the Net Zero Banking Alliance, a United Nations initiative 
led by the banking sector that guides our work on qualitative 
investment portfolio analysis. Through these activities, we 
aim to contribute to halting the rise in the global average 
temperature.
Our climate ambitions
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  7  |  27

Although the impact of climate change on our activities is 
already beginning to be observed today, the materialisation 
of more serious risks is expected around 2040 and in 
the middle of this century. Therefore, in addition to focusing 
on current risks, our analysis also covers the medium-term 
and long- term perspective, which, however, is subject to 
some forecasting error due to assumptions made about 
the changing CO2 content in the atmosphere, the extent 
of regulatory action and consumer behaviour.
In view of the above, for the purpose of this report and to 
enhance our company’s climate resilience, we conducted 
an analysis that allowed us to identify climate risks and 
opportunities in detail on the basis of two climate scenarios, 
covering three timeframes: short-term (2025), medium-
term (2030) and long-term (2050).
This approach provides a comprehensive understanding 
of how climate change may affect our operations and those 
of our customers in different ways. For the analysis 
of climate-related risks and opportunities, two scenarios 
were selected in line with TCFD recommendations:
Below 2°C 
(in accordance with the Paris Agreement)
4°C
By effectively defining both the threats and opportunities 
arising from the climate transition, we are able to take 
actions that, in both scenarios analysed, provide Santander 
Bank Polska S.A. with resilience in the context of the key 
threats, as well as the possibility of exploiting them to 
improve growth dynamics, financial performance and 
the bank’s image.
Scenario analysis
[TCFD: KE/TCFD];  
[ESG: E – Enviroment] 
[PRB: 1 Alignment, 2 Impact]
On our way to meeting the goals of the Paris Agreement, we have simultaneously committed to the following steps:
From 2030 onwards, we 
will cease to fund energy 
companies with more than 
10% of their revenue from 
coal-fired generation.
By 2030, we plan to completely 
reduce the bank’s exposure 
to thermal coal producers 
(expiration of all contracts).
We will achieve climate 
neutrality by 2050.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  8  |  27

Physical risks
We recognise the diverse physical risks associated with 
the impact of weather conditions on business operations. 
Our clients are exposed to diminishing returns on inputs 
caused by circumstances that prevent uninterrupted business 
operations, which can translate into a reduced ability to 
repay debt.
Sources of physical risks include extreme weather events, 
such as violent storms or floods, which in many sectors can 
cause infrastructure disruption or destruction. Particularly 
exposed to physical risks, by the very nature of the business, 
is the agricultural sector, where we have seen an increased 
risk of land erosion affecting the quality and quantity 
of yields.
In the medium to long term, we identify physical risks 
associated with Poland’s deteriorating hydrological situation 
and the threat of drought. The lack of adequate water 
retention systems and water shortages may have a range 
of negative effects, affecting other sectors of the economy, 
including the energy sector. For example, combined heat 
and power (CHP) plants, which rely on river water for their 
cooling systems, may have to reduce power generation 
during periods of drought. We also saw a fire risk in the soft 
commodities sector, potentially causing losses in timber 
production, among others.
Climate risks and opportunities
The analysis covers the entire value chain and all markets in 
which Santander Bank Polska S.A. operates. In the analysis 
two main types of risk were considered, in line with the TCFD 
approach: physical and transformational. We carried 
out an analysis of the main risks in both categories and, 
by identifying the key risks for our latitude, we assessed 
the risks in the sectors in which our clients operate (for more 
information on the risk identification and assessment process, 
see the Methodology Appendix). We considered the evolution 
of physical and transformational risks across the 19 sectors 
in our portfolio in three perspectives: short-term (2025), 
medium-term (2030) and long-term (2050). We conducted 
a similar exercise, focusing on climate-related opportunities. 
The analysis process is shown in the figure below:
Transformational risks
Particularly vulnerable in the context of the transition to 
a low-carbon economy are sectors dependent on coal 
and other fossil fuels, on which the Polish energy mix is 
predominantly based. We recognise the regulatory and legal 
risks associated with higher CO2 costs, stricter reporting and 
data collection requirements, and even regulatory changes 
restricting the operation of some particularly environmentally 
damaging entities.
Regulatory risks may also arise as a result of revised regulations 
imposing climate-friendly solutions, which for some companies 
will mean higher costs of doing business. For example, in 
the automotive industry, the falling cost of electric vehicles and 
expected regulations at EU level may lead to stranded assets 
in the combustion car supply chain. At the same time, market 
competition may force companies from our portfolio to invest 
in increasingly innovative machinery.
We also recognise market risks due to the impact of climate 
change on market variables such as consumer choices, 
changing interest rates and commodity prices. Worth noting are 
also reputational risks linked to growing consumer awareness. 
We understand that all of the above risks can affect the bank 
both directly and through our customers.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  9  |  27

Results of the analysis of the risks’ impact on the bank
[TCFD: KE/TCFD]  
[ESG: E - Environment]  
[PRB: 1 Alignment, 2 Impact]
The approach discussed above allows for the integration 
of climate risk management as part of a broader, 
comprehensive risk management process. In line with TCFD 
recommendations, the outcomes of the analysis of physical 
and transformational climate risks have been integrated 
into the taxonomy adopted by the bank. The results 
of the analysis are presented in the table below.
Banking 
risk
Impact of physical risks
Impact 
of transformational risks
Risk management approach
Credit risk
	
●Climate risks can 
negatively affect 
borrowers and reduce 
their ability to repay 
their debt, particularly 
in the agro sector 
where physical risks can 
reduce crop income.
	
●More frequent and 
intense sudden 
weather events and 
natural disasters may 
additionally decrease 
the value of the loan 
collateral.
	
●EU or national 
regulations may 
adversely affect 
the  debt  
sustainability 
of business 
borrowers operating 
in certain sectors, 
primarily in carbon-
intensive sectors 
such as:
	
●energy sector,
	
●fuel sector,
	
●transport and 
logistics, and
	
●agro sector.
	
●Current risk management activities 
include assessing the vulnerability 
of companies in high-emission sectors 
(e.g. fuel, energy) to transformational 
risks. In accordance with our internal 
procedures for Environmental and 
Social Risk Analysis, we have defined 
risk categories (understood as 
individual ESRM recommendations 
for SCIB clients and ‘environmental 
flags’ for BCB clients described in 
the Corporate Governance chapter). 
Depending on the level of assessed 
risk, we have defined a strategy and 
risk appetite.
	
●We also monitor 
the impact of regulatory changes 
and technological advances in 
the automotive sector – companies 
that do not match the profile defined 
by us may not be eligible for funding.
	
●In future, we plan to significantly 
increase the frequency of risk 
assessments in this area and work 
on model solutions.
	
●At the same time, we are considering 
the introduction of a systemic solution 
for assessing the impact of CO2 prices 
on the financial viability of companies 
(especially in high-emission sectors). 
Energy price stress tests will also be 
an important factor.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  10  |  27

Banking risk
Impact of physical risks
Impact of  
transformational risks
Risk management approach
Market risk
	
●Risk of losses arising 
from changes in 
the value of the bank’s 
assets and liabilities 
caused by natural 
disasters, sudden 
weather events.
	
●An increase in the costs 
associated with CO2 
emissions may raise 
the costs for some 
companies (particularly 
in carbon-intensive 
sectors such as energy 
and fuel). This may lead 
to a reduction in revenue 
for these companies and, 
consequently, a lower 
capacity to undertake new 
investments, which in turn 
may reduce the number 
of new loan applications.
	
●Regulatory pressures 
can indirectly affect 
the financial market 
by limiting investments in 
selected client groups.
	
●We monitor regulatory changes and 
take a number of measures to support 
our customers, e.g. by launching 
financing for low-carbon solutions that 
lead to the mitigation of these risks.
Liquidity risk
	
●Climate change, 
including natural 
disasters and sudden 
weather events, can 
cause a rapid increase in 
the demand for cash.
	
●No significant impact 
of transformational risks 
has been identified.
	
●In line with European and national 
regulations, we have adequate reserves 
and procedures in place.
Operational 
risk
	
●Sudden weather events 
can affect the conduct 
of business at bank 
branches (e.g. flooding, 
power outages).
	
●Increased energy costs 
may raise the expenses 
incurred by the bank (e.g. 
increase in the property 
rental charges).
	
●In 2020, 100% of the energy purchased 
by the bank was green energy.
	
●50% of our branches use energy-
efficient lighting.
Model risks
	
●Business models 
may underestimate 
the value of losses 
caused by sudden 
weather events, which 
are increasing in 
intensity and frequency.
	
●Business models may 
underestimate the impact 
of regulation and market 
changes due to climate 
change, especially in 
the context of supply chain 
analysis
	
●We monitor the impact of weather 
events on the volume of losses and 
analyse the impact of regulation on all 
parts of the supply chain.
	
●With the support of an external advisor, 
we carried out a process of climate risks 
identification and analysis in the bank’s 
key sectors under two climate scenarios 
and three time horizons. The results, 
presented in this report, will allow 
for better calibration of models and 
improved management in specific areas.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  11  |  27

Banking risk
Impact of physical 
risks
Impact of  
transformational risks
Risk management approach
Business 
risks
	
●No significant 
impact of physical 
risks has been 
identified.
	
●In the short-term perspective, 
increased costs associated with 
the transition to a low-carbon 
economy are observed. Some 
of these costs are also passed 
on to consumers, which may 
reduce their willingness and/
or ability to take out consumer 
loans (e.g. to finance a purchase 
of a new car).
	
●Regulation and changes in 
customer choices can create 
new product and service 
opportunities. Failure to 
address them or addressing 
them too late can lead to a loss 
of customers to competitors.
	
●We continuously analyse 
the market situation and 
the actions of competitors, 
introduce new products to our 
range and maintain a dialogue 
with customers.
Reputational 
risk
	
●No significant 
impact of physical 
risks has been 
identified.
	
●Continued funding 
of sectors negatively perceived 
by regulators, the market 
and rating agencies (mainly 
carbon-intensive sectors) could 
negatively affect the bank’s 
rating.
	
●We pay particular attention to 
the transparent communication 
of sectoral policies.
	
●We are integrating the Santander 
Group’s global reputational risk 
management policies into our 
region.
	
●We have a policy of engaging 
clients in counteracting climate 
and environmental change in 
relation to the fuel, energy and 
soft commodities sectors. We 
conduct reputational analysis 
in this context and analyse our 
clients’ climate strategies.
Compliance 
risk
	
●No significant 
impact of physical 
risks has been 
identified.
	
●The regulatory pressure is likely 
to intensify, with a potential 
impact on increased in-house 
and/or advisory costs as a result 
of the obligation to comply with 
new regulations.
	
●If new regulations are not 
complied with, there may be 
a risk of penalties imposed 
by market regulators.
	
●We keep our bank’s regulations 
under review and fully comply 
with the requirements set by EU 
and national regulators.
	
●As part of the global Santander 
Group, we are a member 
of the Net Zero Banking Alliance
The identified key risks, together with the scenario analysis described above, will be used to prepare appropriate risk mitigation 
initiatives, strengthen the resilience of the bank’s strategy and adapt to a changing climate. The process of identifying and 
assessing climate risks is carried out in accordance with the policies and processes described in the next chapter.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  12  |  27

Climate opportunities
[TCFD: KE/TCFD] 
[ESG: E - Enviroment] 
[PRB: 1 Alignment, 2 Impact]
Although climate change is mainly associated with threats, 
many of the investments needed to meet energy and 
climate targets also present opportunities. As the European 
Commission points out, additional investments of EUR 180 
billion per year are already needed to meet the 2030 climate 
targets. In addition, further measures will be required 
to achieve full climate neutrality by 20501. This reality 
is an opportunity to build new infrastructure with zero 
emissions in mind. In addition, the expected EU regulations 
in the transport sector provide an opportunity to finance 
the replacement of company car fleets with zero- or low-
emission vehicles.
The transition towards a low-carbon economy therefore 
presents us with opportunities to support both our current 
and future customers as well as the economic transition 
by mobilising appropriate financing mechanisms. We 
therefore want to develop new products and services, 
including customer advice, while building a brand as 
a trusted partner. As part of our analysis, we have identified 
the following opportunities for Santander Bank Polska S.A. :
Opportunity
Relevant sector/
area
Short term: 
1-3 years
Medium term: 
2025-2030
Long term: 
2030 +
Development of the RES market 
creating opportunities for investment 
in projects and companies related to 
this sector
energy sector / 
cross-sector
Opportunities for involvement 
in projects and cooperation with 
companies active in the development 
and modernisation of pumped-storage 
power plants
energy sector
Potential for participation in 
the financing of decarbonisation 
projects for the bank’s existing clients
cross-sector
Possibility to be involved in financing 
projects promoting electric or low-
emission cars
transport / 
automotive
Financing, especially in the public 
sector, of low-carbon transport 
solutions
transport / 
automotive
Development of advisory services 
for the selection of low-carbon 
solutions for the agro sector and 
development of financial services 
in this area
agro sector
1 European Commission Communication 20.06.2019, Guidelines for reporting non-financial information: 
Supplement on reporting climate-related information.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  13  |  27

Risk management
[GRI: Custom indicator (Description of policies, procedures and results of climate risk 
exposure testing)] 
[TCFD: KE/TCFD]  
[ESG: E - Enviroment] 
[PRB: 1 Alignment, 2 Impact]
Analysis of risks by sector
In order to examine the vulnerability of the sectors in our 
portfolio and to develop an effective approach to managing 
climate risks, we analysed them in three time horizons: 
short-term, medium-term and long-term. The physical and 
transformational risks were rated on a scale of 1 to 5 (where 
1 represents the lowest level of risk and 5 the highest). 
The table below presents the results of this risk analysis 
by sector, together with a presentation of the materiality 
of the sector in the bank’s portfolio. A colour legend with 
an explanation of the assumptions is presented in a separate 
table in the Methodology Appendix; a summary of the legend 
is provided below.
1
2
3
4
5
Sector at risk
2025
2030
2050
The sector’s current 
share in the category
Scenario 2°C
Scenario 4°C
Scenario 2°C
Scenario 4°C
SCIB*
Corpo-
rates*
SMEs*
RF
RT
RF
RT
RF
RT
RF
RT
RF
RT
Fuel sector
+
–
+
–
13%
0.3%
0.03%
Energy sector
+
–
+
–
16%
1%
0.2%
Metals and 
mining sector
+
+
+
+
11%
1%
0.4%
Soft 
commodities 
sector
+
–
+
–
0%
0.1%
1%
Automotive 
sector
+
+
+
–
3%
3%
0.3%
Real estate 
sector
–
+
+
–
6%
31%
15%
Materials and 
chemicals
+
+
+
+
8%
7%
4%
Production 
of packaging
–
+
–
+
0%
3%
1%
Furniture 
industry
–
–
+
+
0.2%
2%
1%
*Portfolio structure at the end of 2021
RF - physical risk / RT - transformational risk
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Methodology
TCFD Report 2021  •  14  |  27

Sector at risk
2025
2030
2050
The sector’s current 
share in the category
Scenario 2°C
Scenario 4°C
Scenario 2°C
Scenario 4°C
SCIB*
Corpo-
rates*
SMEs*
RF
RT
RF
RT
RF
RT
RF
RT
RF
RT
Food industry
+
+
+
+
2%
8%
2%
Agro sector
+
+
+
+
0.3%
1%
28%
Public sector
+
+
+
+
0%
2%
0.01%
Transport and 
logistics
+
+
+
+
0%
9%
14%
Cosmetics 
industry
+
+
+
+
0.3%
0,3%
0.05%
E-commerce
–
+
–
+
0%
1%
1%
Trade
+
+
+
+
35%
22%
27%
Tourism
+
+
+
+
1%
6%
2%
Waste 
management
–
+
–
+
0.09%
1%
1%
Financial sector
+
+
+
+
5%
2%
2%
TOTAL
100%
100%
100%
On the physical risk dimension, many of the sectors received 
a ‘low’ or ‘very low risk’ rating, but we believe that this risk 
will increase in the medium term. In the short term, the agro 
and soft commodities sectors are the most exposed (to 
a medium degree). We also expect, looking ahead to 2030, 
an increase in risk in the energy sector from a rating of 2 (low 
risk) to 3 (medium risk), due to an increase in the likelihood 
of prolonged drought and a possible reduction in power 
generation and intensification of extreme weather events.
*Struktura portfela na koniec 2021
The results of our analysis are broadly consistent 
with the conclusion that decarbonisation is necessary 
primarily in fossil fuel-based sectors. We assessed 
the fuel and power sectors as exposed to very high 
transformational risk.
Introduction
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TCFD Report 2021  •  15  |  27

Both sectors represent a significant portion of our Corporate 
and Investment Banking (SCIB) portfolio (13 and 16% 
respectively).
In the medium to long term, transformational risk (especially 
regulatory risk) will increase significantly in the 2°C 
scenario, due to the anticipated tightening of regulations 
supporting the green transition. We see such growth in 
the food industry, transport and logistics, trade, tourism, 
agro and financial sectors, among others. We recognise 
the importance of the retail sector in this regard as it 
accounts for 35% of the SCIBI portfolio, 22% of the BCBII 
portfolio and 27% of the SME portfolio. We assume that 
in a delayed mitigation scenario (4°C), climate policies 
will tighten more slowly due to less effective cooperation 
of the international community. Among other reasons, we 
have assumed that transformational risks in sectors such 
as automotive and finance will increase in the 2°C scenario, 
while remaining unchanged in the 4°C scenario.
I Corporate and Investment Banking Division
II Business and Corporate Banking Division
Risk exposure
As a next step, our analysis included a calculation of exposure 
to climate risks. In other words, we asked ourselves 
a question what proportion of our portfolio in a particular 
segment (SCIB, BCB, SME) would belong to sectors from 
a particular risk category.
The charts below show the increase in exposure to physical 
risks assuming unchanged portfolio structure (at the end 
of 2021):
Year 2025 –Physical risks
SCIB
SME
BCB
30%
36%
18%
54%
29%
62%
70%
0,29%
1%
SCIB
SME
BCB
11%
Year 2030 (2°C scenario) – physical risks
2%
66%
62%
47%
22%
29%
26%
24%
Year 2030 (4°C scenario) – physical risks
SCIB
SME
BCB
1%
11%
58%
47%
66%
31%
27%
22%
29%
In the short term, the bulk of the portfolio in all areas is made 
up of sectors rated as exposed to ‘very low risk’ and ‘low risk’ 
(e.g. in the SCIB area, these two categories account for almost 
100%). In the SME area, the agro sector was rated as high risk, 
accounting for 29% of the category portfolio. In the medium 
term, we see a rising exposure in the 2°C scenario, driven 
mainly by an increase in the physical risk rating in the energy, 
materials and chemicals, food, transport and logistics sectors. 
On the other hand, in the 4°C scenario, the increase in 
exposure in the medium term is caused by a rating upgrade in 
the financial sector.
We then carried out a similar analysis for transformational 
risks. The charts below show the increase in exposure to 
transformational risks also based on the unchanged portfolio 
structure (at the end of 2021):
1%
Year 2025 – Transformational risks
SCIB
SME
BCB
57%
68%
90%
14%
13%
29%
16%
6%
Year 2030 (2°C scenario) – transformational risks
SCIB
SME
BCB
0,4%
60%
94%
96%
11%
28%
Year 2030 (4°C scenario) – transformational risks
SCIB
SME
BCB
45%
48%
48%
72%
16%
11%
28%
23%
SCIB
BCB
45%
48%
48%
72%
16%
11%
28%
23%
2%
2%
5%
5%
1%
1%
1%
1,3%
1%
3%
3%
3%
3%
3%
3%
1%
1%
1%
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TCFD Report 2021  •  16  |  27

The increase in exposure in the medium term in 
the 2°C scenario is due to a growth in the rating in most 
of the sectors analysed. While only 16% of the Corporate and 
Investment Banking portfolio was rated 5 (very high risk) in 
the 2025 outlook, in the medium term (in both scenarios) 
this is already 28%. Such an increase in risk in this category 
must be considered significant.
In the Business and Corporate Banking portfolio, the following 
sectors have a significant share (above 5%): real estate, 
materials and chemicals, food, retail and tourism. At the same 
time, these are the sectors in which transformational risks 
increases from a rating of 2 (low risk) to 3 (medium risk) in 
the medium term in the 2°C scenario. In the SME portfolio, 
agro, real estate and transport and logistics are the sectors 
with the largest share and their rating in the 2030 horizon 
in the 2°C scenario is 3, which is why as much as 96% 
of the SME area is labelled as ‘medium risk’.
In the 4°C scenario, regulatory risks are expected to increase 
at a slower rate, hence the rating relative to the 2°C scenario 
remains lower. This is particularly true for the real estate 
sector (rating 2), food (rating 2), trade (rating 2) and tourism 
(rating 2).
Risk management policies and procedures
It is worth re-emphasising that the above analysis is 
important because in order to accomplish the transition to 
a climate-friendly economy we need to see multi-sectoral 
emission reductions and ultimately the elimination of 
greenhouse gas emissions in hard-to-abate sectors. These 
sectors currently account for 30% of all global CO2 emissions 
(in particular cement, steel, chemicals and aviation). With 
this in mind, and given our plans and actions already 
underway, it will be crucial to support our clients in their 
transformation, with a particular focus on those sectors 
facing the greatest challenges. We want to engage our 
clients in a dialogue about physical and transformational 
risks, taking into account the diverse realities and level of risk 
associated with the sector.
Accordingly, in addition to the sectoral climate risk study 
described above, we also carried out analyses which lay 
the foundations for our sectoral policies. As stated in the 
Santander Bank Polska Group’s ”Sustainability Policy” (which 
is annexed to the Resolution of the Bank’s Management 
Board of 4 August 2020 ), in 2019 we introduced 
environmental (and social) elements as criteria for evaluating 
projects of the corporate and investment banking segment. 
We implemented a procedure defining a mandatory process 
for analysing socio-environmental risks.
2 Energy Transitions Commission, Mission Possible Report 2018.
In addition, client activities in all segments (SCIB, BCB 
and SMEs) may be subject to exclusions or limitations 
defined in the “Social, environmental and climate 
change risk management policy”, which primarily 
apply to:
	
●oil and gas sector,
	
●energy production and transmission sector,
	
●mining and metals sector, and
	
●soft commodities sector.
In order to manage climate risks correctly and effectively, 
we use both a sectoral approach, where a designated unit 
is responsible for climate risks in a particular sector, and 
a cross-sectoral approach, where additional oversight is 
provided by the Risk Committee.
It is important for us to have a full annual analysis of climate-
related risks and opportunities and an ongoing review of risks 
in the most exposed and priority sectors. This approach will 
allow us to immediately align our assessment of the severity 
of risks and how we manage climate risks with current 
development and regulatory policies and actions taken 
by our portfolio companies.
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Methodology
TCFD Report 2021  •  17  |  27

Metrics and targets
This section of the report contains the emission levels associated with Santander Bank Polska S.A.’s activities in 2021. 
The methodology and scope of the calculations are provided in the Methodology appendix at the end of the report. Below is 
a summary of the calculation of CO2 emissions in Santander Bank S.A.’s own activities (Scope 1) and those directly dependent 
on Santander Bank S.A.’s operations. (Scope 2), as well as business travel (Scope 3).
We use a number of metrics to measure our climate impact, including, among others, kilograms of carbon dioxide emissions 
translated into litres of petrol consumed by the car fleet, emissions from electricity consumption in our offices and district heat 
consumption. The table below provides a detailed summary of our emissions with a description of the sources we have taken into 
account, the consumption by source expressed in the relevant unit of measurement, the type of data and the emission indicator 
together with the source used in the calculation.
Emission category
Emissions IN 2021 (in tonnes of CO2 e)
Location-based
Market-based
Scope 1
5,957.1
5,957.1
Scope 2
29,175.5
15,513.0
Scope 3
94.7
94.7*
Total: scope 1+2
35,132.6
21,470.2
* Only location-based DEFRA data was used.
SCOPE 1:
Source of 
emissions
Consumption
Unit
Data type
Emission 
indicator 
kgCO2e/unit
Source
Emissions tCO2e 
(location based)
Emissions tCO2e 
(market based)
Petrol car fleet
1,446,502.0
litres
actual
2.1935
DEFRA 2021
3,172.9
3,172.9
Diesel car fleet
8,563.5
litres
actual
2.5123
DEFRA 2021
21.5
21.5
Natural gas for 
central heating 
and hot water
12,399.4
MWh
actual
0.1832
DEFRA 2022
2,271.1
2,271.1
Heating oil for 
central heating 
and hot water
154,973.0
litres
actual
2.5401
DEFRA 2021
393.7
393.7
Diesel for power 
generators
1,100.0
litres
actual
2.5123
DEFRA 2022
2.8
2.8
Refrigerant 
R410A
45.6
kg
actual
2,088.0000
DEFRA 2021
95.2
95.2
TOTAL:
5,957.1
5,957.1
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Methodology
TCFD Report 2021  •  18  |  27

SCOPE 2:
Source of 
emissions
Consumption
Unit
Data type
Emission 
indicator
Source
Emissions  tCO2e 
(location based)
Emissions tCO2e 
(market based)
Electricity – offices
26,449.3
MWh
actual
0.0007
KOBiZE
17,245.8
3,583.3
Electricity – remote 
work
809.9*
MWh
estimation
0.0007
KOBiZE
528.1
528.1
District heating
118,151.6**
GJ
estimation
0.0965
URE
11,401.6
11,401.6
TOTAL:
29,175.5
15,513.0
SCOPE 3:
Source of emissions
Consumption
Unit
Data type
Emission 
indicator
Source
Emissions tCO2e 
(location based)
Emissions tCO2e 
(market based)
Car – rental
19,598.0
km
actual
0.1715
DEFRA 
2021
3.4
Bus
14,000.0***
km
estimation
0.0268
DEFRA 
2021
0.4
Train
566,681.4
km
actual
0.0355
DEFRA 
2021
20.1
Aircraft – domestic 
flights
17,160.4
km
actual
0.2459
DEFRA 
2021
4.2
Aircraft – flights in 
Europe
383,859.8
km
actual
0.1535
DEFRA 
2021
58.9
Aircraft – flights 
outside Europe
40,048.4
km
actual
0.1931
DEFRA 
2021
7.7
TOTAL:
94.7
* Estimation based on person-days spent working remotely and assuming that a person working remotely consumes 0.12 kWh per working hour.
** Estimation based on benchmarks of annual heat consumption per m2 of area (extracted from the Statutory Energy Audit for 2020) and area of occupied premises 
(heated with district heating). The calculation takes into account locations abandoned during 2021, but only for the number of days during which they were used 
by the bank.
*** Due to unavailability of data, a distance of 100 km was assumed for each bus journey purchased.
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TCFD Report 2021  •  19  |  27

We monitor resource consumption, own emissions and 
waste production at the majority of our sites through 
an internal data collection and processing system, which 
is audited annually by an independent third party.
In this way, we can identify the key areas that have 
the greatest impact on the environment – including 
the climate – and to take more effective countermeasures.
We have already taken ambitious steps to reduce our own 
emissions by using energy from renewable sources. We 
have also received an accession certificate for the Tauron 
Group’s ECO Premium product. The document confirms 
that the electricity sold to us participates fully in 
the Environmental Energy Sales Guarantee scheme and 
comes from environmentally friendly energy sources – 
mainly hydroelectric power plants. We have thus significantly 
reduced our consumption of energy obtained from non-
renewable raw materials. In addition, we are focusing 
on increasing energy efficiency in our own operations. In 
2021, the bank’s electricity consumption fell by 8.8 per 
cent compared to 2020 and we also reduced our diesel 
consumption by almost four times compared to 2020. 
Thanks to these measures and the purchase of certified 
carbon offset credits, we achieved internal CO2 neutrality 
in 2020.
In 2022, we purchased electric cars to reduce 
our transport-related emissions.
In 2021, 81% of the bank’s purchased 
electricity for the property will be from 
a contract providing energy solely from RES.
The emissivity of our portfolio is also very important to us. 
At this stage, we focused on the energy portfolio, and we did 
so by analysing our client companies that generate electricity 
with conventional generation assets. Looking at the bank’s six 
largest customers in this area, we assumed for the purposes 
of this study that the equity exposure in these companies 
represents 100% of the financed portfolio, taking into 
account the portfolio structure as at 31 December, 2021. 
In accordance with the adopted assumptions, the weighted 
average emissivity of our portfolio in 2021 was 0.896 tCO2 /
MWh, where the basis for the calculation was the emission 
indicators for the surveyed generators (per MWh) and 
the share of exposure to a given company in the energy 
portfolio of power generators (percentage of the financed 
portfolio). Accordingly, the value of the indicator for 2021 
decreased by approximately 1% vs. 2020.
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TCFD Report 2021  •  20  |  27

Methodology
Task Force on Climate-related Financial Disclosures (TCFD)
Presented in 2017, the TCFD’s recommendations are 
a non-binding guidepost for companies approaching 
climate issues responsibly. The general recommendations 
are further supported by detailed guidance published 
in the Supplemental Guidance for the Financial Sector, 
reflecting the high importance that the authors 
of the recommendations place on financial institutions.
The TCFD standards are based on four pillars, around which 
this report has also been arranged for the sake of clarity:
1.	
Governance – a description of the bank’s management 
of its responsibility in the area of climate change risks 
and opportunities.
2.	
Strategy – a description of the actual and potential 
impact of climate-related risks and opportunities 
on the organisation’s operations, strategy and financial 
planning.
3.	
Risk Management – the processes used 
by an organisation to identify, assess and manage 
climate risks.
4.	
Metrics & Targets – disclosures on metrics and targets 
used to assess risks and opportunities, including 
information on CO2 .
The basic premise of the recommendation is that consistent 
and structured disclosures related to the financial sector 
climate would contribute to:
improving the process of responding early to 
risks and exploiting opportunities associated 
with climate change;
Sudden physical risks are particularly 
weather-related and include natural 
disasters, storms, floods, fires or heat waves. 
They can destroy production facilities 
and disrupt supply chains.
Chronic physical risks manifest themselves 
through long-term weather patterns, 
changes in extreme precipitation, higher 
average temperatures, sustained heat 
waves and elevated water levels (seas 
and oceans).
improving market communication practices 
on climate risks;
improving the availability and transparency 
of climate-related data that can be 
systematically analysed to assess 
the materiality of climate risks facing 
the financial sector.
Being financial intermediaries, banks are exposed to 
climate-related risks through lending and other financial 
intermediation, as well as through their own operations. 
According to the TCFD, banks may assume exposure to 
significant climate-related risks from their borrowers, 
customers or counterparties. Furthermore, banks that lend 
to companies directly exposed to climate risk (e.g. fossil fuel 
producers, real estate owners or agri-food companies) or 
trade in the securities of such companies may accumulate 
climate risk precisely through the aforementioned loans 
and holdings in these companies. TCFD stresses that fossil 
fuel-related credit exposure in particular merits disclosure 
in bank reports.
In terms of methodology, in order to present the identified 
climate risks in a consistent and transparent manner, 
the TCFD recommendations suggest to divide risks into two 
groups: physical and transformational.
Physical risks related to the climate can be sudden 
(resulting from specific events) or chronic (intensifying over 
the medium to long term).
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TCFD Report 2021  •  21  |  27

Transformational risks relate to, among other things, legislative changes induced by climate change, fluctuations in market 
sentiment and consumer expectations and choices. In other words, it is the risk arising from the transition towards a low-carbon 
and climate-resilient economy. Within this group, we can distinguish the following risks:
Market-based – changes in the supply and 
demand trends, including increased consumer 
awareness of environmental issues, can reduce 
the viability of some projects.
Regulatory and legal – the legislators’ 
response to climate change may reduce or 
increase the cost of doing business, as well 
as materialise the risk of litigation for not 
avoiding or not limiting adverse climate 
impacts or not adapting to climate change.
Technological – a possible switch to 
technologies less harmful to the climate 
involves additional costs.
Reputational – an irresponsible approach to 
climate risk can put a company’s good name 
at risk when a company’s climate commitments 
are not too ambitious or are not translated 
into actions.
It should be borne in mind that both types of risk have 
the potential to affect the bank and its customers 
in the short-, medium- and long-term perspective.
At the same time, efforts to mitigate and adapt to climate 
change present opportunities for businesses and organisations, 
due to the scale of investment that will need to be made to 
achieve the goals of the Paris Agreement.
The TCFD identifies the following areas of opportunity:
	
●efficient management of raw materials,
	
●new products and services,
	
●investment in renewable energy sources,
	
●access to new markets,
	
●increasing the resilience of the organisation.
These opportunities will vary depending on the company, 
the industry and region of business activity, as well as 
the adopted time horizon.
Scenario
Assumptions
Below 2°C
In line with 
the Paris 
Agreement
	
●A scenario in which global average temperatures stop below 2°C compared to pre-industrial 
levels. The scenario assumes implementation of the Paris Agreement through aggressive 
emissions reductions driven largely by regulatory change; it is characterised by global 
cooperation between governments, society and industry to achieve radical decarbonisation.
	
●We assume that transformational risks are predominant, but there are also market opportunities.
Below 4°C
	
●This scenario assumes global warming of 4°C. We refer to how global emissions would change 
if governments made no changes to existing policies and agreed to delay accomplishment of the 
Paris Agreement targets (delayed mitigation).
	
●Physical risks (which trigger market risks) are predominant.
Scenario analysis
Below is an explanation of the assumptions underlying the scenarios of future climate trends we have chosen.
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TCFD Report 2021  •  22  |  27

Selected sectors and risk assessment method
We analysed the following 19 sectors to identify and assess risks and opportunities
	
●fuel sector
	
●energy sector
	
●metals and mining sector
	
●soft commodities sector
	
●automotive sector
	
●real estate sector
	
●materials and chemistry
	
●production of packaging
	
●furniture industry
	
●food industry
	
●agro sector
	
●public sector
	
●transport and logistics sector
	
●cosmetics industry
	
●e-commerce
	
●trading
	
●tourism (mainly hotels)
	
●waste management, and
	
●financial sector
RAG (red-amber-green) classification of physical and transformational risk assessments
Physical risks
Result
Transformational risks
The sector has a low sensitivity to 
physical risks.
very low risk
The sector is low carbon and independent of fossil fuels. 
It is closer to achieving zero carbon than other sectors.
The sector is to some extent sensitive 
to physical risks, but these can occur 
infrequently
low risk
The sector has lower greenhouse gas emissions than other 
sectors. It is doubtful that climate policies or changes in 
consumer preferences will significantly affect the sector.
There will be some kind of climate-
induced disruption to the sector’s 
operations which the sector will 
experience systematically (such 
disruptions can last for weeks at a time).
medium risk
Major investments are needed in the sector to achieve 
zero-carbon. It is likely that the sector will experience 
some negative impact from climate policies or changes 
in consumer preferences.
The sector is highly exposed to physical 
risks and will have long-term exposure 
and cost exposure due to climate 
change events.
high risk
The sector has higher emissions compared to others and 
will experience adverse demand responses. The sector 
during decarbonisation warrants a low-carbon policy, 
technological innovation and/or investment to achieve 
net-zero.
not applicable
very high risk
The sector relies heavily on fossil fuels. Significant 
investment and climate policy interventions are needed 
for the transformation to take place. Emphasis is on action 
from a wide range of stakeholders. Increased risk 
of premature asset write-downs. Uncertainty regarding 
the ability to participate in the transition and achieve  
net-zero.
In each area, we analysed the physical and transformational risks and rated them on a scale from 1 (lowest risk) to 5 (highest). 
The method for assessing the level of climate risk in each sector is shown in the table below.
Introduction
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Methodology
TCFD Report 2021  •  23  |  27

Sectoral risk analysis method
The following explanation refers to the method of risk 
analysis in our client sectors, which is set out in the table in 
the Risk Management chapter.
The assessment of each sector was first made in the short 
term (2025). Given the small time interval, climate scenarios 
were not included in the short term. The evaluation 
of physical risks (FR) and transformational risks (TR) includes 
a rating on a scale of 1-5 (the logic behind the assignment 
of a rating is explained in the table above).
We conducted the analysis for the medium term (2030) and 
long term (2050) in two scenarios: under 2°C (aggressive 
emission reduction) and 4°C (delayed mitigation). Due to 
the significant uncertainty for the long-term (2050) outlook, 
we conducted a trend analysis (increasing risk (+), no change 
(-)).
To show the materiality of the sector, the last three columns 
of the sector risk analysis table indicate the percentage 
represented by the sector in the portfolio of the 19 sectors 
analysed in one of the three categories – Santander 
Corporate and Investment Banking (SCIB), Corporates 
and Small and Medium Enterprises (SMEs). The sectors 
with a greater than 5% share of the category portfolio are 
highlighted in dark grey.
Method and scope for calculating 
the carbon footprint
The Greenhouse Gas Protocol and Corporate Value Chain 
(Scope 3) Accounting and Reporting Standard were used to 
calculate CO2 levels from the Metrics and Targets section 
of this report.
Emission factors developed by the UK Department 
for Environment Food & Rural Affairs (DEFRA 2021)1 , 
the National Balancing and Emissions Management Centre2 
and the Energy Regulatory Authority3 were used. The table 
below describes the scope of the emission calculations, 
the emission sources and the calculation methodology:
1 https://www.gov.uk/government/publications/greenhouse-gas-reporting-
conversion-factors-2021
2 https://www.kobize.pl/uploads/materialy/materialy_do_pobrania/wskazniki_
emisyjnosci/Wskazniki_emisyjnosci_grudzien_2021.pdf
3 https://www.ure.gov.pl/pl/cieplo/energetyka-cieplna-w-l/9009,2019.html
Scope
Emission sources included in the report
Calculation methodology
SCOPE 1
Leakage of 
refrigerants
R410A
Emissions calculated on the basis of replenished 
R410A refrigerant volume data provided by 
Santander and an emissions indicator from DEFRA 
2021.
Emissions from 
mobile sources
1.	diesel
2.	petrol
Emissions calculated using diesel and petrol 
consumption data for the transport fleet, provided 
by Santander and an emissions indicator from 
DEFRA 2021.
Emissions from 
stationary 
sources
3.	natural gas
4.	fuel oil
5.	diesel fuel
Emissions calculated on the basis of heating oil and 
natural gas consumption data for heating, diesel for 
emergency generators and the emission factor from 
DEFRA 2021.
Introduction
Corporate 
governance
Strategy
Risk 
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Metrics 
and targets
Methodology
TCFD Report 2021  •  24  |  27

Scope
Emission sources included 
in the report
Calculation methodology
SCOPE 2
Electricity
Offices
Emissions calculated on the basis of electricity consumption 
data and an emissions indicator from the KOBiZE.
Market Based emissions calculated based on supplier fuel 
structure data. Due to a lack of information about suppliers 
in some of the premises used by Santander, the % supplier 
structure in the bank’s branches was used.
Remote 
work
No actual data available – estimate based on person-days 
spent working remotely and assuming that a person working 
remotely consumes 0.12 KWh per working hour.
Emissions calculated on the basis of estimated consumption 
and the grid emission indicator obtained from the NERC.
District 
heating
Offices
No real-life data available – estimation based on benchmarks 
of annual heat consumption per m2 area (from the 2020 
Statutory Energy Audit) and area of premises in use (heated 
with district heating). Calculations include locations abandoned 
during 2021, but only for the number of days they were used 
by the bank.
Emissions calculated on the basis of estimated consumption 
and the emissions indicator from DEFRA 2021.
SCOPE 3
Business 
trips
Car hire
Emissions calculated on the basis of distance travelled in leased 
cars, provided by Santander, and an emissions indicator from 
DEFRA 2021.
Bus 
transport
No real-life data available – a distance of 100 km was assumed 
for each bus journey purchased.
Emissions were calculated as the product of the estimated 
route length multiplied by the number of trips purchased and 
the emissions indicator from DEFRA 2021.
Rail 
transport
Emissions calculated from data on distance travelled by rail, 
provided by Santander and the emission indicator from 
DEFRA 2021.
Air transport
Emissions calculated on the basis of domestic distance 
travelled (broken down by domestic, European and 
international flights) provided by Santander and the emissions 
indicator from DEFRA 2021.
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  25  |  27

Table with references to TCFD recommendations
Recommended disclosures
Place in the raport
Disclose the organisation’s management policies on climate-related 
risks and opportunities.
Corporate governance
a. Describe the management board’s oversight of climate-related risks 
and opportunities.
Corporate governance
b. Describe the role of management in assessing and managing climate-
related risks and opportunities.
Corporate governance
Disclose the actual and potential impact of climate-related risks and 
opportunities on the organisation’s operations, strategy and financial 
planning, if such information is relevant.
Strategy
a. Describe the climate-related risks and opportunities that the 
organisation has identified in the short, medium and long term.
Physical risks, Transformational risks, 
Climate opportunities
b. Describe the impact of climate-related risks and opportunities on the 
organisation’s operations, strategy and financial planning.
Our climate ambitions, Towards a climate-
neutral bank, Scenario analysis, Climate risks 
and opportunities, Results of the analysis of 
the risks’ impact on the bank
c. Describe the resilience of the organisation’s strategy, taking into account 
different climate-related scenarios, including a 2°C or lower scenario.
Scenario analysis, Climate risks and 
opportunities
Disclose how the organisation identifies, assesses and manages 
climate-related risks.
Risk management
a. Describe the organisation’s processes for identifying and assessing 
climate-related risks.
Analysis of risks by sector
b. Describe the organisation’s processes for managing climate-related 
risks
Risk management policies and procedures
c. Describe how the processes for identifying, assessing and managing 
climate-related risks are integrated into the overall risk management of 
the organisation.
Risk management policies and procedures
Disclose the measures and targets used to assess and manage 
relevant climate-related risks and opportunities, if such information is 
relevant.
Metrics and targets
a. Disclose the indicators used by the organisation to assess climate-
related risks and opportunities in line with the risk management strategy 
and process.
Metrics and targets
b. The extent of greenhouse gas emissions and the associated risks must 
be disclosed.
Metrics and targets
c. Describe the objectives used by the organisation to manage climate-
related risks and opportunities and performance against the objectives.
Metrics and targets
Introduction
Corporate 
governance
Strategy
Risk 
management
Metrics 
and targets
Methodology
TCFD Report 2021  •  26  |  27