Annual Integrated Report

76 Annual Integrated Report Table of Contents Introduction Value Creation | Economic Performance | Environmental Social Governance Appendices [2-19; 2-20] Executive and Governance bodies compensation Our Compensation Policy sets forth criteria that recognize exceptional performance while simultaneously deterring undesirable behaviors. The rules stipulate the implementation of deferred payment and the inclusion of Clawback and Malus provisions, which are mechanisms associated with adherence to internal norms and exposure to risk. The policy also promotes meritocracy by recognizing individual contributions across various departments in achieving business objectives and executing strategies. The Annual Variable Compensation ("PPG") program for executives includes a range of quantitative and qualitative indicators, including three ESG indicators covering the topics of diversity, financial empowerment, and green financing. Within the PPG, the Board of Directors, upon the recommendation of the Compensation Committee, conducts a qualitative assessment of each quantitative metric. This process considers how each objective was attained and other pertinent factors. In regard to the overall compensation (including fixed remuneration, short and long-term incentives, and benefits) of board members and executive directors, the amounts are approved at a shareholders' meeting, as mandated by local legislation. Learn more about the compensation of the members of the Board of Directors, Advisory Committees, and Fiscal Board in the Reference Form and 20-F, available on the Investor Relations website. In 2022, the total amount of taxes owed and paid reached nearly R$ 20 billion, with approximately R$ 5 billion pertaining to own taxes and over R$ 14.7 billion attributed to third-party taxes. [207-1] Tax Policy Guidelines • Comply with legally mandated tax obligations by applying a reasonable interpretation of the applicable regulations to meet the purpose and intent of the law ⚫ Refrain from establishing or acquiring companies domiciled in countries or territories regarded as tax havens unless specifically authorized by the Board of Directors, along with favorable recommendations from both the Audit and Contingency Committees Respect transfer pricing rules, particularly in operations that are not related to Santander Brasil's regular business activities • Abstain from providing any form of tax advisory or tax planning when promoting and selling financial products and services to customers . Cooperate with the tax administration, grounded in the principles of transparency and mutual trust, and provide, in a faithful and complete manner, the information required for the fulfillment of its tax obligations ⚫ Disclose tax expenses, duly audited, in the quarterly Financial Statements, accessible through the Investor Relations website. ("Santander Open Channel"), as well as institutional initiatives and communications sent to employees. We want to foster ethical conduct both within our organization and throughout our external relationship network. To accomplish this, we disseminate the Supplier Code of Conduct and the Code of Ethical Conduct on a regular basis, exercise due diligence in the hiring and monitoring of third parties, and consistently invest in the acculturation of this audience. Codes and policies related to the topic • Code of Ethical Conduct • Anti-Corruption Policy • Related-Party Transaction Policy Supplier Code of Conduct • Anti-Money Laundering and Counter Terrorist Financing Policy Code of conduct Santander's Code of Ethical Conduct addresses fundamental themes for an ethical culture, encompassing confidentiality and privacy of information, respect, diversity, and integrity. All employees are required to be familiar with and abide by this Code, under penalty of disciplinary action. To ensure a comprehensive understanding of our Code, the Compliance department and/or the Ethics and Compliance Committee coordinate training and communication efforts. These directives are also widely spread to our suppliers. Awareness and commitment to the rules occur throughout the procurement phase, through adherence to the Supplier Code of Conduct during the competition process, as well as the approval stage, and formalization by means of contractual provisions (see more in Supplier Relationship). Failure to uphold these guidelines results in the imposition of legally and contractually mandated measures or sanctions. organization's key risks and reduce the likelihood of regulatory breaches or employee conduct failures. Among the risks assessed are those related to corruption, which must be avoided without exception. To this end, we adopt stringent practices that guide our relationships with customers, suppliers, partners, and recipients of donations and sponsorships. As shown in the table below, over 1,000 different types of assessments concerning this topic were completed in 2022. [205-1] Process integrity analysis' 367 318 212 179 15 Suppliers Donations Clauses Gifts and Presents Anti-Corruption Sponsorships Significant risk identified: vulnerabilities in anti-corruption provisions in legal instruments and money laundering risk. Investment in compliance technology We constantly invest in specialized compliance technology to further enhance our security standards. Since 2020, we have implemented algorithm- and machine learning-based monitoring systems to ensure accuracy, security, and speed in our internal processes, as well as to improve our AML/CFT analysis (anti-money laundering, countering the financing of terrorism, and countering the financing of weapons of mass destruction) and reporting to the Financial Activities Control Board ("COAF"). We also perform tests, utilizing data, to improve the management of AML, Conduct and Regulatory risks, including suppliers, partners, and recipients of donations and sponsorships. This initiative also enables us to detect potential engagement of these groups in acts detrimental to the public administration and/or activities that do not align with our principles. [2-15] Conflicts of interest To handle situations involving conflicts of interest, we rely on the Related-Party Transaction Policy. This document establishes guidelines to ensure that all decisions, particularly those involving related parties and other potential conflicts of interest, are made with the Bank and its shareholders' best interests in mind. The Policy delineates the parameters for identifying related parties, specifies circumstances that may give rise to conflicts of interest, outlines guidelines for conducting transactions with related parties, and prescribes procedures that must be followed by officers and directors involved in such transactions or other potential conflicts of interest. [207-1] Tax governance Our organization has a Tax Policy, approved by the Board of Directors, that defines the fundamental tenets of our conduct in all tax affairs. Its objective is to outline directives (see the box) and best practices aimed at preventing and mitigating tax and reputational risks. We also have the Tax and Standards department, responsible for overseeing compliance with tax obligations, thereby ensuring the prevention and mitigation of tax and reputational risks. [3-3] Material topic: Culture, Conduct, and Responsible Banking INTEGRITY AND ETHICAL CONDUCT We offer the market and society a secure, responsible, and ethically principled business environment. That is precisely why we are constantly engaged in the prevention, detection, and remediation of fraudulent activities and other illegal practices, including combating corruption, bribery, money laundering, insider trading, anti-competitive behavior, child labor, forced labor and/or slavery-like practices, discrimination, and any form of inappropriate conduct in our business operations. To guide the behavior of our employees, executive officers, and directors, we rely on a range of Corporate Governance tools, such as the participation of senior management in compliance matters, institutional policies and codes, the Ethics and Compliance Committee, the whistleblowing channel [2-16] Compliance and internal controls Ethics and Compliance Committee This deliberative body advises the Board of Directors and the Executive Committee on compliance risk prevention and mitigation. Its purpose is to ensure conformity with the Bank's applicable ethical principles, laws, and regulations, including the conduct standards that govern employee activities. Corruption-related risk assessments The Compliance Department performs a Risk Control and Self-Assessment ("RCSA") exercise to identify and assess the [2-26] Whistleblowing channel Santander's Open Channel receives reports of any potential illicit activity involving Santander or its affiliated companies. It also handles violations of the Code of Ethical Conduct and/or internal policies. This resource is available to employees, interns, customers, partners, suppliers, and anyone who wishes to report any situation related to these topics without the need to identify themselves. Confidentiality, information secrecy, and non- retaliation are guaranteed. Santander 77