Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 64

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 64
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 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. Sant