Letter from Michał Gajewski – CEO of Santander Bank Polska S.A.

ESG topics have already become firmly embedded in the activities of financial institutions. They are becoming increasingly important for all our stakeholders and the global economy. Therefore, the implementation of our ESG strategy is and will continue to be a priority for us both in our day-to-day work and in our long-term planning.

2023 has been a challenging year for the entire financial sector in terms of preparing for new regulatory requirements. The Corporate Sustainability Reporting Directive (CSRD) requires us to report data according to ESRS standards already for the current year with publication in 2025. Sustainability reports will be subject to attestation requirements by auditors. In addition, financial institutions are required to disclose their Green Asset Ratio (GAR) for 2023. This ratio illustrates the extent to which the activities we finance relate to sustainable projects, as defined by the EU Taxonomy.

In 2023, we set up an internal panel of experts that analyses sustainable transactions and products for compliance with the Taxonomy and our internal green financing classification system – SFCS. This system allows us to accurately determine whether our financing is truly sustainable. We base our analysis on the Banco Santander Group’s sustainability criteria developed in line with international standards and regulations (including the EU Taxonomy).  According to this analysis, the amount of sustainable financing provided by the Santander Bank Polska Group for 2023 was PLN 7,671 million. Compared to 2022, this is an increase of 145%!

Regulations are not only a challenge, but also an opportunity. They make monitoring progress on ESG strategies continuous. They bring consistency and transparency to the reporting of sustainability issues. They make it easier to analyse and prepare for risks such as climate change. We are already experiencing these changes and, in the long term, they will affect the operations of all companies worldwide.

The transformation of the Polish economy should become permanently accelerated. Achieving the goals set out by the European Green Deal requires a synergy of bank financing and public funding. That is why it is so necessary to step up work on systemic solutions at the level of local authorities and governments. For our part, we are increasing the volume and scope of transactions related to the financing of environmentally sustainable projects year on year. These include renewables, energy-efficient real estate and electromobility. We will also support investments in new technologies such as energy storage and hydrogen installations.

An area we have been developing for several years now is ESG risk management. We recognise that the fight against climate change invariably remains the biggest challenge for the global economy and that climate-related risks and opportunities have a key impact on the financial sector. Therefore, we define and integrate social and environmental risks, including climate risks, into the bank’s holistic risk management system. We are developing our analysis, which is prepared on the basis of TCFD recommendations. It includes an assessment of climate opportunities and risks in several scenarios and time dimensions. On this basis, we can increasingly define the impact of these risks on the bank’s portfolio.

We are consistently building a friendly working environment that provides respect and appreciation, as well as opportunities for development. This is confirmed, among other things, by the Great Place To Work certificate and by our presence on the Diversity IN Check list – a ranking of Polish employers most advanced in diversity and inclusivity management. We carry out many internal projects, such as Diversity Ambassadors for top management, Employee Networks, educational actions, trainings, webinars (e.g. Diversity Month) and the Santander Women podcast.

Education is another area of our social commitment. Our flagship Santander Universidades programme provides opportunities to learn new skills and enhance knowledge free of charge. More than 38,000 people from Poland have already benefited from free courses and scholarships, with 21,000 of them in 2023. We are also continuing our proprietary educational project 'Finansiaki’, which makes it easier for teachers and parents to introduce children to the world of finance and entrepreneurship. Last year, more than 16,000 people benefited from our educational materials.

The Santander Bank Polska Foundation has been successfully operating for 26 years. More than 1,500 bank employees are involved in the Foundation’s voluntary work. Every year, together with the Foundation and Santander Group companies, we organise the charity fundraiser „We Will Double Your Impact”, in which we match the amounts donated to double their value. Last year, we raised funds for the development and operation of the chat room run by the Power to the Children Foundation, which operates the national helpline 116 111. Thanks to our customers and volunteers, we donated more than PLN 700,000 for this purpose.  In 2023, the Santander Bank Polska Foundation and Santander Leasing carried out a nationwide grant programme for local governments „Together for Eco-Change”. The total value of the grants awarded in this programme was PLN 1 million. The funds will finance a minimum of 17 electric vehicle charging stations.

Our economy is likely to be a beneficiary of the global remodelling of supply chains in the coming years. Reshoring and nearshoring, that is moving investments closer to consumer markets, are processes that are increasingly influencing investors’ perception of Poland as an attractive place for business. An influx of new foreign investments can be expected to boost economic growth in the coming years.

The global economy appears stable, but in an environment of high interest rates it will be difficult to make a strong recovery. The development of the Polish economy will be stimulated by the unblocking of EU funds. Nearly EUR 50 billion in grants and another several tens of billions in loans could spark a very strong development momentum. It is likely that these funds will be used to invest in the energy sector and to transform the Polish economy. This is a good time to implement a new energy policy based on RES.

Through a sustainable business model, we create value for customers, employees, shareholders, local communities and other stakeholders. Decisions made here and now will have an impact on the world that future generations will live in. That is why we act with concern for the long-term impact on our surroundings, including the natural environment.