Annual Integrated Report

Risks, opportunities, and impacts [3-3] Material Topics: Portfolio alignment to achieve net-zero emissions by 2050; ESG risk management, incorporating climate; ESG finance; Equality, diversity, inclusion, and well-being; Financial well-being of the client and responsible con- sumption; Productive inclusion and empowerment; Operational and business resilience; Culture, Conduct, and Responsible Banking; Privacy, data protection, cyber security, and technology; Advocacy We have identified four areas in which the Bank may have a greater impact owing to the risks and opportunities they entail. Environmental Risks and opportunities Real and potential impacts Annual Integrated Report Table of Contents Introduction Value Creation | Economic Performance | Environmental Social Governance Appendices Social Risks and opportunities Real and potential impacts The effects of climate change can lead to financial losses. ⚫ Physical risk: associated with potential damages incurred by customers due to the location of their assets and activities. • Transition risk: associated with the way customers tackle technological transformation, market and policy shifts in response to climate change Physical risk impact: → Acute impact: increase in costs due to asset damages or devaluation resulting from extreme weather events (e.g., hurricane, flood, etc.). → Chronic impact: potential reduction in customer revenues due to the long-term effects of climate change (e.g., rising sea levels, changes in average temperatures, etc.). Transition risk impact: → Increase in carbon prices, which may lead to higher operating costs for customers with greater exposure. → Potential change in demand for products and services from our customers, with a consequential financial impact on the company. Quality employment Failure to adapt to novel work paradigms and poor employee management practices may result in a talent exodus or a decrease in employee engagement → Profitability affected by lower employee engagement. → Need to attain new knowledge and skills in response to constantly evolving work paradigms. → Uncertainty in succession and leadership plans due to difficulty in attracting and retaining talent. A well-prepared and committed team, enabling us to provide superior customer service and drive business growth. → A motivated team ensures better customer service and a greater ability to attract new customers. → Relying on a diverse and well-prepared talent pool enhances the ability to confront future challenges and achieve better results. → The Bank's size makes it possible to increase the quality of employment within the communities where it operates. Climate Change The transition towards a low-carbon economy creates a host of commercial opportunities sustainable (green financing, advisory, etc.) products, customer → Promoting sustainable financing and new product development to cater to the needs of our existing customers and attract new clients. → Positioning Santander as a sustainable and responsible bank. Good governance Social Market instability, the current competitive landscape, heightened regulatory demands, and certain risks, such as cyber threats, may affect the Bank's operations and results. → Reduced ability to generate liquidity, capital, and advance the growth of our operations. → Economic losses stemming from cyber-attacks, fraudulent activities, etc. → Fines associated with bad practices. The potential erosion of our clients' purchasing power may pose a risk of default on their debts. → Credit losses arising from the failure to meet debt obligations. → Impact of a potential loss of customer confidence stemming from the perception that the Bank is detached from social issues. Responsible management and business development to a ensure Good governance and proper adaptation changing landscape business continuity and the trust of our stakeholders. → Business continuity and sustainable results generation through the soundness of our financial balance. → Positive perception among our stakeholders leads to a reduction in potential reputational risks. Health and Financial Inclusion Financial inclusion initiatives represent an opportunity to extend the Bank's services to the most disadvantaged groups → Development of financial products and services tailored to these groups to help them prosper. -> → Positioning the Bank as a trustworthy entity, with a clearly defined social strategy and purpose. 22 Santander 23

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