Company: BCDRF
Filing Date: 2025-03-03
Form Type: 6-K
Source: 0000891478-25-000057
Chunk: 16

Company: Banco Santander, S.A.
Filing Date: 2025-03-03
Form: 6-K
Chunk 16
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 Taxonomy climate objectives (climate change mitigation and climate change adaptation).

In addition to developing the classification of sustainable activities listed in the Taxonomy, from a prudential perspective, the CRR3 has introduced new requirements for integrating ESG risks in this framework, in particular including definitions, a "more ecological" infrastructure supporting factor, climate considerations in guarantee assessments and additional mandates to assess whether the prudential treatment of exposures related to assets or liabilities subject to the impact of environmental or social factors should be adjusted. To assess precisely whether specific prudential treatment is required, the CRR3 provides three mandates for creating the reports that assess data availability for the exposure classes, evaluating the actual risk situation of exposures that affect environmental factors compared with the risk situation of other exposures and the potential effects of prudential treatment on financial stability. If considered necessary after publication of these reports, a legislative proposal to amend the current prudential framework may be submitted to the Commission by 31 December 2026 to ensure a prudential framework which will continue supporting financial stability and a sustainable transition.

Furthermore, the CRR3/CRD6 regulatory package contains additional disclosure obligations concerning ESG, obligations on reporting to competent authorities and the obligation to establish specific plans for addressing short-, medium- and long-term financial risks derived from ESG factors, including generated risks as a consequence of the transition period.

In 2024 the EBA held a consultation on the Guidelines on the management of ESG risks. As result several points have been concluded: reference methodology for the identification and measurement of ESG risks, minimum standards and reference methodology for the management and monitoring of ESG risks, and transition plans addressing the key aspects included in the new CRD6.

At the international level and particularly regarding reporting obligations on climate risks, it is important to note that the Basel Committee published a consultation paper at the end of 2023 proposing a series of qualitative and quantitative requirements which should be disclosed in the entities' Pillar 3 reports. In this document the Committee acknowledges that precise, consistent and quality climate data is still evolving. However the Committee believes that the disclosure requirements will expedite the availability of said information and will facilitate banks' prospective risk assessments.

Other regulatory initiatives approved in 2024 or that are in the final stage of being approved by European institutions include the following:

• The Review of the Energy Performance of Buildings Directive, which targets to expedite the transition of Member States' real estate portfolio and seeks greater standardisation in Energy Performance Certificates, and will be trans