Annual Integrated Report

30 [3-3] Material topics: Portfolio alignment to achieve net-zero emissions by 2050; ESG risk management, incorporating climate; ESG finance; Operational and business resilience Annual Integrated Report Table of Contents Introduction Value Creation | Economic Performance Environmental Social Governance Appendices Climate Change Within the context of climate change, the financial sector's most significant impact occurs indirectly through credit and investment operations. As such, Santander has pledged to achieve net zero greenhouse gas ("GHG") emissions across the Group by 2050. This commitment extends to all business operations, including emissions from lending, advisory, and investment services. In 2021, the Santander Group was one of the founding members of the Net Zero Banking Alliance (NZBA), an initiative spearheaded by the United Nations Environment Programme (UNEP), wherein it committed to: → achieving net-zero emissions across its operations and loan and investment portfolio by the mid-21st century. → setting intermediate targets for priority sectors to be met by 2030 (or earlier); and → prioritizing customer engagement with products and services that facilitate the transition towards a low-carbon economy. Tackling climate change is a top priority for the entire Santander Group. We support the goals of the Paris Agreement, which aim to limit the increase in global temperatures to 1.5°C above pre-industrial levels. Our strategy [201-2; 203-2] Combating climate change is a core objective for Santander. We have a well-structured climate strategy that encompasses four key fronts: Aligning our portfolio with the goals of the Paris Agreement Reducing our environmental impact Supporting our customers in their green transition Incorporating climate into risk management 1) Ensuring our portfolio is in line with the objectives of the Paris Agreement and setting targets in accordance with the NZBA to aid in limiting the temperature rise to 1.5°C above pre-industrial levels. 2) Supporting our customers in their transition towards a low- carbon economy by providing financial solutions, training, and innovation. 3) Reducing our environmental impact by implementing efficiency measures, procuring all our electricity from renewable sources by 2025, and maintaining carbon neutrality by offsetting emissions from our operational activities.. 4) Incorporating climate into risk management, with the purpose of comprehending and managing the sources of climate risks within our portfolios. Governance [2-12; 2-13; 2-23; 2-24] The advancement of the organization's climate strategy is closely monitored by its key decision-making bodies. The Board of Directors oversees the topic as needed, with the support of the Sustainability Committee and the Risk and Compliance Committee ("CRC"). In 2022, the Board of Directors approved the Net Zero Plan for Brazil. The theme of climate change was also on the agenda of the Continuing Education Program ("CEP"), which is designed for independent members of our governance bodies. The Sustainability Committee monitors the progress of the themes and challenges us to act according to best practices. Its meetings are held at least four times a year and may be convened on an ad hoc basis. The key results and performance indicators of the environmental and climate agenda are reported to both the Executive Committee and the Sustainability Committee through an executive dashboard every month.. To learn more about the composition and regulations of all our decision-making bodies, please visit the Investor Relations website To execute our strategy, the Institutional Vice Presidency ("VPI") is responsible for the governance of the sustainability ecosystem, which includes the Net Zero Plan. The Social, Environmental and Climate Responsibility Policy ("PRSAC") is also managed by the Institutional Vice Presidency. This document sets forth the social, environmental, and climate principles and directives that guide our business practices and interactions with stakeholders. The PRSAC has received the seal of approval from both the Executive Committee and Board of Directors and can be accessed through this link. Finally, we have established specific ESG-related goals that are applicable for assessing the performance of executives and other staff members, generating a direct impact on variable compensation. See details on goals and incentives in the Governance chapter. Risk Management [201-2; 203-2] Since 2002, the Bank has been applying and refining a set of practices that enable us to have an integrated view of the social and environmental risks that may exacerbate the conventional risks managed by the Organization. In recent years, we have broadened our incorporation of climate change factors into risk management, which now includes procedures for the handling of both physical and transition risks. Water stress One of the foremost effects of climate change in Brazil is the modification of rainfall patterns, leading to a rise in the frequency of extreme hydrological events, such as floods and prolonged droughts. As of 2020, our social and environmental assessments for credit approval have expanded to encompass clients' exposure to water stress and their reliance on this resource, utilizing a proprietary tool that considers three key factors: 1. water management level in operational processes 2. vulnerability or resilience of the economic activity 3. region (hydrographic basin) where the business is located The social and environmental and climate risk rating also considers the extent of customers' vulnerability to physical and transition risks, including factors such as economic activity, carbon intensity, value chain, use of more energy-efficient technologies, among others. Learn more about our methodology for analyzing social and environmental and climate risk in the Governance chapter. Climate stress test To gain a thorough understanding of our risk exposure and the business's ability to withstand potential climate change impacts, in 2022 we collaborated with the Bank's economic scenario modeling department to develop climate scenarios that incorporated both physical and transition risks. The physical risk scenario analyzed the potential impact of a water crisis on Banco Santander Brasil's portfolios. To evaluate the transition risk, the NGFS (Network of Central Banks and Supervisors for Greening the Financial System) Delayed Transition scenario was utilized as a baseline, following the methodological references of the European Central Bank ("ECB"). Materiality Assessment Santander regularly conducts materiality assessments to determine the concentration of its corporate wholesale and retail portfolio in sectors that are most susceptible to the impacts of climate change. From a sector-based perspective, companies have been categorized according to their national economic activity classification ("CNAE"). The identification of sectors with the highest exposure to physical and transition risks was determined by following the guidelines provided by the Task Force on Climate-Related Financial Disclosures ("TCFD") and the United Nations Environment Programme Finance Initiative (UNEP FI), as well as an assessment conducted by our internal environmental experts. 'This scenario assumes that global emissions will not decrease until 2030 and that the extent of action taken will vary across nations and regions, based on the climate policies currently in place. Santander 31