Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 119

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 119
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Annual report 2024 84

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

| For more information on our engagement and voting strategies, seesantanderassetmanagement.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