Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 88

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 88
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 simulator for customers and non-customers to estimate the work required to renovate their home, including projected heating bill savings and emissions avoided.

For our CRE portfolio, which is less granular, we perform these actions individually with customers:

• Agreement with CBRE to advise institutional and commercial customers on aligning and enhancing the energy efficiency of their buildings.

• In 2024, Santander España has joined the commercialization of the ICO MRR Verde line, with the aim of supporting the green transition with special terms and conditions and making buildings more energy efficient through renovation.

• In 2024, we created a new Business Growth team that specializes in CRE. This enables us to control new origination better and spot opportunities for energy renovation and green finance.

Commercial real estate and mortgages in UK

Santander UK adopts the Partnership for Carbon Accounting Financials (PCAF) framework to calculate financed emissions associated with the Mortgages portfolio. Financed emissions are calculated at property level using the value at origination, the outstanding loan amount as of 31 December 2023, and building emissions taken from EPC assessment and the PCAF emissions factors for the property. Where no EPC exists, in mortgages we used a postcode to infer the EPC or, where this wasn’t possible, a regression model trained with multiple known property characteristics. In commercial real estate we used proxy information from the PCAF database. This resulted in a PCAF score of 3.2 for mortgages and 4.0 for commercial real estate, with a portfolio coverage of over EUR 201.96 billion for mortgages and EUR 11.04 billion for commercial real estate. Emissions intensity for mortgages as of 31 December 2023 was 20.87 kgCO2e/m² and 25.40 kgCO2e/m² for commercial real estate.

The evolution of the financed emissions associated with our mortgages portfolio in 2023 compared to last year is mainly explained by an update of the internal methodology we use for real estate financed emissions. In line with market practice, we base our calculations on the Carbon Risk Real Estate Monitor (CRREM) emission factors, resulting in lower attributed financed emissions.

Our initial assessment of Commercial Real estate highlights the challenge of having sufficient coverage of asset level EPC data. We were heavily reliant on use of proxy data which is reflected in the overall PCAF score. We will continue to focus on improving data quality for this portfolio and will streamline the process.

We also refreshed levers analysis to understand how the change in UK government might