Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 123

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 123
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 by a team of analysts to perform a global ESCC risk assessment. ESCC assessments of Santander’s CIB clients cover child labour, forced labour, workplace discrimination, freedom of association, working conditions, complaint mechanisms for employees and impacts on communities in relation to their own operations and their supply chain. The ESCC risk and compliance departments deepen into cases that uncover red flags. We usually conduct this extended due diligence exercise alongside the client to deepen our understanding of issues and determine the existence (or not) of corrective or remediation measures. Moreover, in the client ESCC risk assessments, we analyse the existence and effectiveness of reporting channels available to affected communities, to understand if a process is in place to avoid and manage adverse impacts on communities due to their own activities or those of their supply chain. The findings of the analysis (and its impact on credit and other risks) are escalated to the bank’s risk approval committees and are considered in decision-making process. According to the methodology we use to analyse customers’ climate transition plans, we carry out an annual assessment of ESCC risk for CIB clients in sectors where we have set alignment targets (oil & gas, power generation, automotive, steel, and aviation) to classify them based on their greenhouse gas emissions, emissions targets, and transition risk management. We continued to consider how ESCC risk affects our customers so as to make our risk assessments more rounded and offer customers support in their transition. In 2024, the ESCC risk and compliance departments continued to work with the business units to strengthen the governance and the management of these risks in sustainable finance transactions. Our groups of experts responsible for reviewing and classifying operations as sustainable are the cornerstone of our risk management for these transactions. In addition to the analysis performed by the ESCC risk teams, the Financial crime compliance (FCC) teams establish controls to mitigate the environmental crimes detailed in the next section.

| For more details on environmental, social and climate change risk management, see section2.3.2. 'Risk management cycle'. |

ii. Equator Principles The Equator Principles (EP) are a voluntary framework for financial institutions to identify, assess and manage environmental and social risks when financing projects. We have been a signatory to the EP framework and applied these principles to project-related transactions (especially project and export finance) since 2009 according with its scope. The Group has an internal procedure to manage the environmental and social (E&S) risks of project-related transactions. This procedure guides the application of the EP. The assessment of transactions that