Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 205

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 205
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) for two climate objectives and the eligibility ratio of the four remaining objectives. To be aligned to the European taxonomy, activities must meet the specific taxonomy criteria and ensure that it causes no significant harm to any of the other environmental objectives (DNSH) and meets minimum social safeguards (MSS).

In the Pillar 3, according to the EBA/ITS/2022/ we disclose the GAR based on the turnover alignment of the counterparty for the general purpose lending part. Although, according to the Commission Delegated Regulation (EU) in the annual report we disclose the GAR twice, based on the turnover and the CapEx taxonomy alignment of the counterparty for general purpose lending exposures. In addition, this report includes eligibility for the new four objectives, water and marine, the transition to a circular economy, pollution prevention, and the protection and restoration of biodiversity and ecosystems.

As required under the Disclosures Delegated Act, our GAR represents the exposures aligned with the EU Taxonomy in the numerator divided by total on-balance sheet volumes 22 , and 3% (turnover-based) 23 . The exposures aligned to the EU Taxonomy and included in the numerator are:

• Aligned exposures in the household loan portfolio: residential property loans (mortgages) and vehicle loans. 24

• Aligned exposures to financial and non-financial corporations subject to CSRD based on the alignment ratio publicly disclosed by the counterparties (both CapEx and turnover based alignment).

As for the eligible volumes, our eligibility ratio for the two climate-related objectives is 34% (both CapEx and turnover based), considering eligible vehicles, mortgages and building renovation portfolios, as well as information disclosed by financial and non-financial counterparties.

The difference between the eligible volumes and aligned volumes (i.e. eligibility ratio vs. GAR) is mainly driven by three reasons:

• European Taxonomy criteria is strict. Many activities which do not meet its thresholds, do contribute to the transition of a greener economy.

• The numerator and denominator are not symmetric. Santander has 24% of the adjusted balance sheet exposure (GAR denominator) to non-financial

corporations not subject to CSRD (mainly SMEs and companies from outside EU), which cannot be included as eligible or aligned financing, therefore environmentally sustainable.

• There are limitations to the available data and documentation. There is still a lack of robust evidence to verify alignment in specific purpose lending, especially when it comes to validate DNSH and MSS, as well as availability of data from