2013 Annual Report

EMPREGO EKIERANCE AND COMPLAINT MECHANISMS PRODUCT PORTFOLIO Policies and Commitments The guidelines on this issue are included in the Code of Ethics and the policies for the Santander Reporting Channel; Human Rights; Global Policy on Gender Equality; and Diversity. - Monitoring Reports involving employees are concluded within 45 days. Monitoring and controlling the cases under analysis is the responsibility of the Compliance Office, which receives details of the facts ascertained by the areas involved in the solution or investigation, and monitors cases until they are effectively resolved. The findings, measures taken and resolutions are submitted to the Committee of Internal Occurrences on a monthly basis. The indicators of the Santander Reporting Channel are reported to the Executive Committee on a regular basis for the purposes of monitoring and targeting specific action. Remediation - Once the case reported to the Santander Reporting Channel has been ascertained, the appropriate disciplinary measures or sanctions are applied. Cases admitted will result in the implementation of corrective and accountability measures that range from the enforcement of administrative measures such as a warning, transfer of function or workplace, to dismissal or legal proceedings, on a case by case basis. Indicators Consolidation Number of grievances about labor practices filed, addressed and resolved by means of formal grievance mechanisms G4-LA16 There were no labor-related complaints involving suppliers in 2013, while one labor-related complaint was registered involving employees. The complaint was not admitted and has been concluded. With regard to complaints filed in previous years, no labor-related claims involving suppliers or employees were dealt with in 2013. Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanism G4-HR12 COMPLAINTS Received Admitted Resolved Resolved in 2013, filed in 2012 143 73 127 35 There were no human rights-related incidents involving complaints from suppliers in 2013. Materiality The item Product Portfolio is important to us at Santander because its management enables the Bank to reduce risks and enhance the social and environmental impacts of its business activities. Moreover, this is a major topic within the sector; it represents a future challenge; and is related to important regulations and laws. Impacts - the effective management of the product portfolio generates gains such as the development of more competitive and efficient products, which promote good practices for businesses and proper financial management for households; and a reduction in the risk involving joint liability for the social/environmental problems of clients or funded projects; while on the other hand, the incorrect management of the product portfolio increases risks (financial and joint liability risks), reduces the Bank's competitiveness and may generate undesirable side-effects for clients, such as overindebtedness. Policies G4-FS1 The Bank has three policies in place geared to sustainability which govern the product portfolio and business activities: the Social and Environmental Risk Policy (RSA), the Environmental Policy and the Microcredit Policy. Social and Environmental Risk: The Social and Environmental Risk analysis aims to both detect and minimize social/environmental risks involving clients or projects funded by loans. As a means of promoting positive impacts and minimizing negative impacts, Santander monitors analyses; provides the business and credit analysis teams with regular training in social/environmental risk; includes social and environmental variables in the scope of the analysis for the acceptance of new clients and participates in forums in order to become acquainted with and influence decisions being made in relation to the subject. The policy is available on the intranet standards website and on the Internet, in an abridged version, at http://sustentabilidade.santander.com.br/oquefazemos/ praticasdegestao/Paginas/RiscoSocioambiental.aspx Environmental Policy: The purpose of this policy is to establish the rules for the prevention and management of the direct and indirect environmental impacts generated by the Bank's business, in addition to the opportunities in relation to the environmental issues within the Organization's scope of influence. 168 Annual Report 2013 169

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