Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 179

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 179
---
 of passenger cars, covering a significant majority of the exposure in Europe.

H. Mortgage portfolio in the United Kingdom for 2022, and in the United Kingdom and Spain for 2023. Assessment includes Scope 1 and 2 emissions based on actual (where available) and modelled EPC's.

I. Commercial real estate portfolios in the United Kingdom and Spain. Assessment includes Scope 1 and 2 emissions based on actual (where available) and modelled EPC's.

More detail regarding other financed emissions calculations from our balance sheet, see section SN 7.1 Green transition .

iii. Internal carbon pricing

Internal carbon pricing is a tool that helps internalize the external costs of carbon emissions and align operations with broader sustainability objectives. Setting an internal carbon price does not appear to be the most appropriate approach for our type of operations and core business model as we strive to help our

customers go green. Nonetheless, we do consider carbon pricing in several of our internal review and assessment tools, such as scenario analyses and transition risk calculations. These processes reflect the "real world" costs in our prices. A “fictitious” internal carbon price would cause disparity between the customer’s actual ability to pay debt and internal valuations. We encourage the

Annual report 2024 130

| Contents |     | Business model and strategy |     | Sustainability statement |     | Corporate governance |     | Economic and financial review |     | Riskmanagement and compliance |

creation of carbon prices in real economies to facilitate the transition to a low-carbon economy.

Grupo Santander’s strategy to lessen the environmental impact of our operations involves reducing CO 2 e emissions and offsetting the emissions that we’re unable to reduce. We follow a strict carbon credits selection process that includes due diligence on compliance and consistency with our environmental, social and climate change policy. Credits are certified under some of the industry's most well-known standards. Moreover, the carbon credits we purchase are ratified by an independent rating agency to validate their integrity. We actively monitor the voluntary carbon credit market to adapt our offsetting strategy to best practice.

Offsetting serves to internalize the cost of emissions (scopes 1 and 2) from our own operations.

iv. EU Paris-aligned benchmarks

Because of our financing and investment operations, Santander is not excluded from the EU Paris-aligned benchmarks. These benchmarks are designed to align investment with the Paris Agreement’s goals and include undertakings that meet special sustainability standards. They exclude undertakings that do not meet those standards.

We disclose our exposure