Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 979

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 979
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. We have recently participated in climate stress regulatory exercises according to which the current overall coverage of potential losses would be adequate in the time horizons of the maturities of our portfolios.

According to the materiality assessment that we carried out in September 2024, sectors with very high climate risk (oil and gas and mining and metals), mainly due to transition risk, accounted for 14% of the total corporate & investment banking credit portfolio. For these and other sectors we have alignment metrics and action plans. For more information about the materiality assessment, see section 2.3 ' Embedding ESG in r is k management' in the 'Sustainability statement' chapter in Part 1 of this annual report.

Initiatives and business practices of financial institutions with respect to climate matters and other matters of public policy, including environmental, social and governance (ESG) matters, have recently become the subject of significant scrutiny by regulatory agencies and government officials. Views on sustainability or ESG practices, particularly those related to climate issues, have become ideological issues and both opponents and proponents of various ESG-related matters have increasingly engaged in a range of activism to advocate their positions. In particular, there are a growing number of initiatives in certain jurisdictions aimed at discouraging or limiting the consideration of ESG factors by financial institutions that may conflict with certain regulatory requirements to which we are subject or the expectations of our clients, shareholders and other stakeholders. Such differing, sometimes conflicting, views and regulations on sustainability and ESG-related matters increase the risk that certain of our actions, or lack of action, on such matters will be perceived negatively. Additionally, the overall expectations of regulators and our clients, shareholders and other stakeholders in certain jurisdictions, particularly in Europe, with respect to certain of these issues may differ significantly from those in other jurisdictions, such as the United States.

Furthermore, our relationships or ability to transact with clients and customers, and with governmental or regulatory bodies in certain jurisdictions could be adversely affected if our decisions with respect to doing business with companies in certain sensitive industries are perceived to harm those companies, result in violations of law and breaches of fiduciary duty or to align with particular ideological, political or social views. We are also exposed to associated risks of non-compliance with

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relevant legal requirements, including fines, penalties, litigation, regulatory sanctions, difficulties in obtaining governmental