Santander Bank Polska SA

**4. GOVERNANCE AND DELEGATED AUTHORITIES**

Environmental, social and climate change risk analysis is carried out in accordance with established procedures.

This analysis must be integrated into the workflow and governance structures established for the management and control of risks, such as credit admission or investment decision. It is the responsibility of the risk approver (committee or individual authorizer) to ensure that decisions are made taking into account the environmental, social and climate change risks, and the criteria defined in this policy.

**5. GOVERNANCE OF THE POLICY**

**5.1. Ownership of the policy**

ESG Risk Management Office function is responsible for drawing up this policy.

The owner of this policy is ESG Risk Management Office. The document is approved by the Management Board in accordance with the regulatory risk model.

**5.2. Interpretation**

ESG Risk Management Office is responsible for interpreting this policy.

**5.3. Effective date and review of the policy**

This policy will come into force on the date indicated in the Management Board Resolution adopting it.

Its contents will be reviewed on a regular basis, and any changes or modifications considered appropriate will be made.

## 3. PROCESSES AND PARTICIPANTS

Environmental, social and climate change risk analysis is carried out in accordance with established procedures.

This analysis must be integrated into the workflow and governance structures established for the management and control of risks. It is the responsibility of the risk approver (committee or individual authorizer) to ensure that decisions are made taking into account the environmental, social and climate change risks, and the criteria defined in this policy. [...] ## 4. GOVERNANCE OF THE POLICY

##### 4.1. Ownership of the policy

The Credit Risk function is responsible for drawing up this policy.

The owner of this policy is Risk Intelligence Business Portfolio Management Department in Risk Management Division. The document is approved by the Management Board in accordance with the regulatory risk model.

##### 4.2. Interpretation

Risk Intelligence Business Portfolio Management Department is responsible for interpreting this policy.

##### 4.3. Effective date and review of the policy

This policy will come into force on the date indicated in the Management Board Resolution adopting it.

Its contents will be reviewed on a regular basis, and any changes or modifications considered appropriate will be made.

**4. GOVERNANCE AND DELEGATED AUTHORITIES**

Environmental, social and climate change risk analysis is carried out in accordance with established procedures.

This analysis must be integrated into the workflow and governance structures established for the management and control of risks, such as credit admission or investment decision. It is the responsibility of the risk approver (committee or individual authorizer) to ensure that decisions are made taking into account the environmental, social and climate change risks, and the criteria defined in this policy. [...] **5. GOVERNANCE OF THE POLICY**

**5.1. Ownership of the policy**

ESG Risk Management Office function is responsible for drawing up this policy.

The owner of this policy is ESG Risk Management Office. The document is approved by the Management Board in accordance with the regulatory risk model.

**5.2. Interpretation**

ESG Risk Management Office is responsible for interpreting this policy.

**5.3. Effective date and review of the policy**

This policy will come into force on the date indicated in the Management Board Resolution adopting it.

Its contents will be reviewed on a regular basis, and any changes or modifications considered appropriate will be made.

**The Members of the Management Board manage the Company's affairs jointly, in particular:** [...] * set up standing and ad hoc committees and designate persons responsible for steering the work of these committees. [...] * Public Policy Committee [...] **Supervisory Board** > The Supervisory Board of Santander Bank Polska S.A. exercises continuous supervision over the bank's activities and may appoint committees and designate persons responsible for managing their work.

Actions in the area of climate risk management and taking appropriate steps to exploit opportunities are the responsibility of the Management Board as well as the Supervisory Board. [...] We implemented a new governance model for the responsible banking agenda. [...] We established an ESG Forum and appointed 11 ESG Leads representing each division of the bank.

Actions in the area of climate risk management and taking appropriate steps to exploit opportunities are the responsibility of the Management Board as well as the Supervisory Board. [...] We implemented a new governance model for the responsible banking agenda. [...] We established an ESG Forum and appointed 11 ESG Leads representing each division of the bank.

#### 1.2 Sustainability Governance at the Santander Bank Polska Group

In order to analyse the opportunities, risks and challenges from matters related to sustainability, including climate change, the Bank has established the following forums:

- The Responsible Banking and Organisational Culture Committee of Santander Bank Polska that assists the Bank's Management Board in fulfilling its oversight responsibilities with respect to the responsible business strategy and sustainability issues of the Bank and the Santander Bank Polska Group.

- The Inclusive & Sustainable Banking Steering Group, a special forum that supports the Committee's works and proposes and monitors the sustainability strategy. This steering group is composed of senior managers.

The management and monitoring of sustainability issues at Santander Bank Polska is the responsibility of the unit in charge of Responsible Banking and CSR [...] #### 6.1 Ownership

The unit in charge of Responsible Banking and CSR is responsible for drawing up this policy.

The owner of this policy is the Management Board of Santander Bank Polska. Prior to approval, the Policy was reviewed by the Responsible Banking and Organisational Culture Committee.

**7** **GOVERNANCE**\n\nTo analyse the opportunities, risks and challenges of Responsible Banking and Sustainability issues, including climate change and human rights, Grupo Santander has the following governance bodies:\n\n - The Responsible Banking and Corporate Culture Committee, which assists the board with responsible business strategy and in Responsible Banking and Sustainability matters concerning the Santander Bank Polska Group.\n\n - The ESG Forum, which gives support to the committee, proposes and oversees sustainability strategy, and is in charge of implementing the Santander Bank Polska Group's responsible banking agenda. The forum is formed by senior executives.\n\nAccording to the principle of proportionality, each entity of the Santander Bank Polska Group has its own governing bodies to manage and keep track of sustainability matters. Appointed representatives of the Group's entities will participate in quarterly meetings on ESG works status.\n\nThe subsidiary entities, in accordance with the principle of proportionality, will establish the governing bodies (units, committees, forums or individuals) necessary for the management and monitoring of sustainability issues. Appointed representatives of subsidiaries will participate in quarterly ESG status meetings convened by the Santander Bank Polska's Sustainability and ESG Team.\nWhere appropriate, skills in, and knowledge of, responsible banking and sustainability, climate change will be a determining factor for forming governing bodies.\n\n**8** **DOCUMENT OWNERSHIP & OVERSIGHT**\n\n**8.1. Ownership**\nThe Sustainability and ESG Team is accountable for drawing up this Policy.\nThe owner of this policy is the Management Board of Santander Bank Polska. Prior to approval, the Policy was reviewed by the Responsible Banking and Organisational Culture Committee.\n**8.2. Interpretation**\nThe Sustainability and ESG Team is accountable for interpreting this policy.\nIt will be the responsibility of the Sustainability and ESG Team to inform the corresponding units in the Bank's Group subsidiaries of any revision or modification of this Policy for its correct adoption. This function will also be responsible for making the proper follow-up of said adoption.\n**8.3. Date of validity and periodic review**\nThis Policy will come into force on the date it is published. Its contents will be reviewed on a regular basis, and any changes or modifications considered appropriate will be made.\nThis Policy is published for general knowledge on the corporate intranet and on the website\n**https://esg.santander.pl/2022/en/governance/corporate-governance-strategy-and-policies/.**

Activities in the area of climate risk management and making appropriate steps to take advantage of opportunities are the responsibility of the Management Board as well as the Supervisory Board. These bodies support the risk management strategies by accepting key policies, participating in supporting committees, reviewing and accepting risks and reports. The Management Board is responsible for setting our mission and long-term action plans, including the climate strategy and its main objectives. In making its decisions, the Management Board takes into account the assessments, information and analyses of the unit responsible for risk management, on the basis of which it adopts the "Risk Appetite Statement". The level of acceptable risk ("risk appetite") is then approved by the Supervisory Board. Based on the defined limits, observation1 limits are set and risk management policies are constructed. In addition, the member of the Management Board responsible for risk management provides the Supervisory Board with relevant risk information in order to create a complete risk profile of the bank and to make appropriate decisions in this respect. **The Supervisory Board's remit is, among other things,** to review the bank's overall management strategy and risk management strategy, also with a view to the long-term interests of the bank. In making its decisions, the Management Board also takes into account the assessments, information and analyses of the unit responsible for risk management. In addition, the bank has a Responsible Banking and **Organisational Culture Committee, which supports** the bank's Management Board in fulfilling its supervisory responsibilities with regard to the responsible business strategy and sustainable development at the company and Santander Bank Polska Group levels. The CEO is also the Committee Chairman and his responsibilities include defining the strategy and annual objectives in the field of responsible banking and corporate culture and ensuring the implementation of the provisions of Santander Bank Polska S.A.'s socio-environmental policies. This Committee is supported by the ESG Forum, which is tasked with planning ESG activities, coordinating their implementation in the bank, and reporting periodically to the Responsible Banking and Corporate Culture Committee and the bank's Management Board. Members of the ESG Forum include senior managers representing all divisions. One of the bank's most important units in the area of climate risk management is the Risk Committee, which is involved in the process of identifying climate risks and opportunities. The process was also carried out for the purpose of this report.

## Responsible Banking and Corporate Culture Committee of Santander Bank Polska

The bank's CSR area is managed by the Responsible Banking and Corporate Culture Committee, chaired by the CEO.

## The Committee's duties and responsibilities include:

* defining strategies and annual objectives in the field of responsible banking and corporate culture,
* managing responsible business policy and corporate culture in Santander Bank Polska Group,
* ensuring the implementation of the provisions of the social and environmental policies of Santander Bank Polska ,
* approving long-term action plans on responsible banking and corporate culture of Santander Bank Polska,
* coordinating the responsible banking strategy and corporate culture, providing oversight and aligning with the Group's business objectives,
* monitoring and evaluating undertakings and projects implemented under the strategy,
* conducting an analysis of the organisation in terms of responsible banking and compliance with corporate culture standards.

Accordingly, in addition to the sectoral climate risk study described above, we also carried out analyses which lay the foundations for our sectoral policies. As stated in the Santander Bank Polska Group's "Sustainability Policy" (which is annexed to the Resolution of the Bank's Management Board of 4 August 2020 ), in 2019 we introduced environmental (and social) elements as criteria for evaluating projects of the corporate and investment banking segment. We implemented a procedure defining a mandatory process for analysing socio-environmental risks. [...] In order to manage climate risks correctly and effectively, we use both a sectoral approach, where a designated unit is responsible for climate risks in a particular sector, and a cross-sectoral approach, where additional oversight is provided by the Risk Committee. [...] It is important for us to have a full annual analysis of climate-related risks and opportunities and an ongoing review of risks in the most exposed and priority sectors. This approach will allow us to immediately align our assessment of the severity of risks and how we manage climate risks with current development and regulatory policies and actions taken by our portfolio companies.

Accordingly, in addition to the sectoral climate risk study described above, we also carried out analyses which lay the foundations for our sectoral policies. As stated in the Santander Bank Polska Group's "Sustainability Policy" (which is annexed to the Resolution of the Bank's Management Board of 4 August 2020 ), in 2019 we introduced environmental (and social) elements as criteria for evaluating projects of the corporate and investment banking segment. We implemented a procedure defining a mandatory process for analysing socio-environmental risks. [...] In order to manage climate risks correctly and effectively, we use both a sectoral approach, where a designated unit is responsible for climate risks in a particular sector, and a cross-sectoral approach, where additional oversight is provided by the Risk Committee. [...] It is important for us to have a full annual analysis of climate-related risks and opportunities and an ongoing review of risks in the most exposed and priority sectors. This approach will allow us to immediately align our assessment of the severity of risks and how we manage climate risks with current development and regulatory policies and actions taken by our portfolio companies.

The responsibilities of the Management Board also include the management of climate risks and the related activities are under the control of the Supervisory Board. Among other things, these bodies approve key policies and the internal control system, and participate in the review and acceptance of risks. The Management Board is responsible for developing an ESG (environmental, social and governance) strategy covering climate risks and integrating it into the business strategy in line with the Santander Group's Net Zero strategy. [...] The Management Board is responsible for overseeing and approving the Responsible Banking Strategy and the integration of ESG criteria into the business strategy (in the short, medium and long term) and as part of the risk management process. The responsibilities related to the ESG agenda are distributed among the Management Board members as follows: à management of ESG risks is the responsibility of the Vice President in charge of Risk Management Division, à green finance matters are the responsibility of the Management Board Member in charge of Business and Corporate Banking Division, à coordination of the Santander Bank Polska Group's activities related to Responsible Banking, including ESG quality reporting – is the responsibility of the Head of the Corporate Communication and Marketing Area, which operates outside the divisional structure, à quantitative ESG reporting is the responsibility of the Management Board Member in charge of Accounting and Financial Control Division. [...] The Audit and Compliance Committee will review the ESG Report and the ESG ratings assigned to the bank and the Group.

In addition, the Management Board is responsible for developing a climate strategy and setting its main objectives in line with the Net Zero strategy of Banco Santander Group. Decision-making takes into account the assessments and information and analyses of the body responsible for risk management which is the Risk Committee. This committee is involved in the process of identifying various climate risks and opportunities, and based on its guidelines, the Risk Appetite Statement is adopted. The Management Board is responsible for overseeing and approving the Responsible Banking Strategy and the integration of ESG criteria into the overall business strategy (in the short, medium and/or long term) and as part of the risk management process. ESG risks are the responsibility of all Board Members. The Risk Division acts as the second line of defence in ESG risk management. In the near future, there are plans to analyse environmental risk activities and develop a full accountability model, including the definition of the role of internal control. [...] The bank's standing committees, which are responsible for managing the bank's environmental, social and economic impacts, include: [...] Public Policy Committee, [...] Responsible Banking and Corporate Culture Committee*. *The key committee with responsibility for managing sustainability and ESG issues is the Responsible Banking and Corporate Culture Committee which supports the Management Board in overseeing the Responsible Banking and Sustainable Development Strategy – both at the company level and at the level of the entire Santander Bank Polska Group. The President of the Management Board is also the chair of this committee, and its responsibilities include defining the strategy and annual goals of Responsible Banking and Corporate Culture and ensuring the implementation of the provisions of Santander Bank Polska S.A.'s social and environmental policies. [...] The Committee is supported by the ESG Forum. The Forum's task is to analyse challenges, opportunities and risks related to the EU Sustainable Finance agenda, plan ESG activities, coordinate their implementation, and report periodically (twice a year) to the Responsible Banking and Corporate Culture Committee and the bank's Management Board. Members of the ESG Forum include senior managers from all divisions and areas.

## 3. PROCESSES AND PARTICIPANTS

Environmental, social and climate change risk analysis is carried out in accordance with established procedures.

This analysis must be integrated into the workflow and governance structures established for the management and control of risks. It is the responsibility of the risk approver (committee or individual authorizer) to ensure that decisions are made taking into account the environmental, social and climate change risks, and the criteria defined in this policy. [...] ## 4. GOVERNANCE OF THE POLICY

##### 4.1. Ownership of the policy

The Credit Risk function is responsible for drawing up this policy.

The owner of this policy is Risk Intelligence Business Portfolio Management Department in Risk Management Division. The document is approved by the Management Board in accordance with the regulatory risk model.

##### 4.2. Interpretation

Risk Intelligence Business Portfolio Management Department is responsible for interpreting this policy.

##### 4.3. Effective date and review of the policy

This policy will come into force on the date indicated in the Management Board Resolution adopting it.

Its contents will be reviewed on a regular basis, and any changes or modifications considered appropriate will be made.