Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 86

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 86
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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 portfolio.

To calculate emissions, we use the Partnership for Carbon