Disclosures related to Regulation 2020/852

Regulation (EU) 2020/852 of the European Parliament and of the Council on the establishment of a framework to facilitate sustainable investment amending Regulation (EU) 2019/2088, known as the EU Taxonomy is a system of uniform classification of sustainability-driven activities to support investors in their investment decisions. The EU Taxonomy imposes a number of reporting obligations on companies subject to the requirement to publish non-financial information, which for credit institutions will come into force on a larger scale in 2024 and fully in 2026. Ultimately, the key performance indicator for the sustainable activities of credit institutions will be the Green Asset Ratio (GAR), which shows the percentage of investments and exposures towards activities which are eligible under the taxonomy with regard to defined environmental objectives for the 'covered assets’. During the two-year transition period, the main subject of disclosure is the eligibility ratio of the activities vs. the taxonomy in terms of two climate objectives: contribution to climate mitigation and to climate change adaptation. The identification of taxonomy-eligible economic activities is the first step in the process of assessing the compliance of the economic activity with the technical eligibility criteria of the taxonomy.

The tables below contain the quantitative information of the Santander Bank Polska Group subject to disclosure during the transition period in accordance with Article 10.3(a), (b) and (c) of Commission Delegated Regulation (EU) 2021/2178 supplementing Regulation 2020/852. The source data for calculating the required percentages are mainly derived from FINREP forms, i.e. prudentially consolidated financial statements prepared for central banks. The components and aggregates used have the same information capacity and limitations as the FINREP report.

Total gross asset structure as at 31 December 2022

No. Items included in covered assets (in million PLN) Balance-sheet value 31.12.2022 Share in gross assets
Share in gross assets
I. Exposure to households 84,641.0 31.9% 35.1%
II. Exposures to undertakings that are subject to an obligation to publish non-financial information 1 4,040.1 1.5% 12.9%
III. Exposures to undertakings that are not subject to an obligation to publish non-financial information 2 106,760,7 40.3% 20.0%
A. Total potentially eligible assets (I+II+III) 195,441.8 73.7% 68.0%
IV. Derivatives 3 7,187.7 2.7% 1.5%
V. On-demand interbank loans 971.6 0.4% 0.3%
VI. Other assets 18,134.4 6.8% 6.7%
B. Total assets covered (I+II+III+IV+V+VI) 221,735.5 83.6% 76.5%
No. Items excluded from covered assets
(in million PLN)
Balance-sheet value 31.12.2022 Share in gross assets
Share in gross assets
VII. Exposures to central governments4) 39,294.3 14.8% 20.5%
VIII. Exposures to central banks 3,898.1 1.5% 2.8%
IX. Trading portfolio 5) 245.0 0.1% 0.2%
C. Total exclusions (VII+VIII+IX) 43,437.4 16.4% 23.5%
Total gross assets (B+C) 265,172.9 100% 100%
1. The 2022 figure represents exposures to identified non-financial undertakings and financial institutions that are covered by the Non-Financial Reporting Directive 214/95/EU (NFRD). The 2021 figure is based on data available in the FINREP report and includes all exposures to financial institutions and non-financial undertakings net of the portfolio of credit claims on small and medium-sized enterprises.
2. The 2022 figure includes all exposures to financial institutions and non-financial undertakings excluding the portfolio of entities subject to the NFRD regime. The figure for 2021 represents the portfolio of credit claims on small and medium-sized enterprises.
3. The balance of derivative transactions includes derivatives from the financial assets held for trading and instruments recognised under hedge accounting.
4. The figure reported for 2022 excludes exposures to local governments, which in the previous year were reported together with central government institutions in accordance with the presentation applicable to FINREP reporting.
5. Trading portfolio without derivatives.

The reporting of taxonomy-eligible activities uses the category of 'covered assets’, which will also be used in compliance reporting. Such assets are considered to be total gross balance sheet assets excluding exposures to central governments, central banks, supranational issuers and the trading book. These assets represent 83.6% of the Santander Bank Polska Group’s total asset as at 31 December 2022, with 73.7% of total assets analysed for eligibility (excluding the following items: derivatives, on-demand interbank loans, cash and cash-equivalent assets and other assets).

Share of Taxonomy-eligible activities as at 31 December 2022 and 31 December 2021.

Eligible exposures by entity (in million PLN) Mandatory approach
Mandatory approach
Eligible exposures considering CAPEX for
non-financial undertakings
Eligible exposures considering TURNOVER ratio for non-financial undertakings
Eligible exposures 31.12.2021
Non-financial and financial undertakings 849.4 313.4 N/A
Households (loans collateralised by residential immovable property and car loans)1 51,851.5 51,851.5 51,063.3
Total Taxonomy-eligible activities 52,700.9 52,164.9 51,063.3
Share of Taxonomy-eligible activities2 23.8% 23.5% 26.6%
Share of Taxonomy-noneligible activities3 76.2% 76.5% 73.4%
1. The figure for 2021 does not include car loans granted to households.
2. Taxonomy-eligible economic activity means activities described in dedicated delegated acts regardless of whether they meet the technical eligibility criteria listed therein. For the reporting periods ending 31 December 2021 and 31 December 2022, a delegated act on climate covering two environmental objectives (climate mitigation and climate adaptation) applied.
3. Taxonomy-noneligible economic activity means an activity that does not meet the conditions in (2) above.

The key transitional performance measure, the eligibility ratio, defines the share of covered assets attributable to activities that are taxonomy-eligible in terms of two environmental goals implemented to date (out of six defined), regardless of whether they meet the technical criteria for classification set out in the relevant delegated act. The classification of environmentally sustainable activities is based on the NACE nomenclature of economic activities, the statistical classification of economic activities in force in the European Union.

When calculating the eligibility ratio, the numerator accounts for taxonomy-eligible financial assets, including loans and advances and debt and equity securities of financial institutions and non-financial undertaking subject to the Non-Financial Reporting Directive (NFRD) and certain credit receivables in the portfolio of households and local government units, mainly loans secured by real estate. Covered assets are reported in the denominator.

As part of its non-financial reporting for the year ended 31 December 2022, Santander Bank Polska Group has prepared quantitative eligibility information at the mandatory level. Extended information based on estimates that can be disclosed on a voluntary basis has not been provided. Moreover, due to data limitations in the first reporting period for non-financial companies’ disclosures on eligibility and compliance with the taxonomy of natural gas and nuclear energy activities, the Group’s disclosures in question do not include information in this regard.

The Group has identified exposures to non-financial undertakings and financial institutions meeting the criteria set out in Article 19a or 29a of Accounting Directive 2013/34/EU and covered by Non-Financial Reporting Directive 214/95/EU (NFRD), based on a source data warehouse in accordance with FINREP granularity.

In the mandatory disclosure, publicly available indicators reported by the aforementioned counterparties (public interest entities), i.e. TURNOVER and CAPEX indicators of non-financial undertakings relating to turnover and capital expenditure and eligibility indicators in the case of financial institutions, were used to calculate the taxonomy-eligibility of general-purpose debt instruments. When the purpose of the proceeds of a debt instrument was identified and taxonomy-eligible, the proceeds were allocated in their entirety to taxonomy-eligible economic activities. Green debt instruments were treated as eligible at full value, as were the mortgage portfolio and household motor vehicle loans.

In line with the mandatory approach, as at 31 December 2022, the eligibility ratio (share of Taxonomy-eligible economic activities) of the Santander Bank Polska Group was 24% according to CAPEX and TURNOVER. The share of potentially eligible assets in total assets reached 74%.