E&S Risk in the sugar sector:

the view from Santander

Christopher Wells
Global Head, Environmental & Social Risk
How Santander analyzes the sugar sector

Annual review

Information sources
- Annual review using internal questionnaire
- Check for Bonsucro certification
- Client website
- News on the internet

Output of the analysis

- Statement/advice, usually valid for one year
- Sometimes, E&S strings attached to credit renewal
How Santander analyzes clients in Brazil

Annual review

Information sources
- Annual review using external questionnaire
- Questionnaire filled out by client
- Client website
- Review of govt websites (env. prot. agencies, Ministério Público, etc.)
- News on the internet

Output of the analysis

- Sustainability rating on scale of 1 to 5, which affects the credit rating
- Statement/advice, usually valid for one year
- Sometimes, E&S strings attached to credit renewal
What Santander values in the industry

In general
- In questionnaire filled out by client: transparency
- On website: transparency, performance data and targets
- In dialog with Santander: technical explanations, contact with E&S areas

Specifically for sugar mills

- In Brazil: Bonsucro certification (or preparation for such)
- Certification adds points to sustainability rating, which affects credit rating
- Care and transparency on suppliers
- Initiatives to conserve water
- Biodiversity
- Diversity of employees
 5

RenovaBio
Since 2019, RenovaBio has stimulated the production and consumption of clean fuels. The incentive for production is made
possible through trading of Carbon Credits (CBios). Santander helped create this market and was the first trader.

Main objectives
I – Contribute to meeting Brazil’s Paris Accord commitments under the One CBio is equivalent to one ton of
UNFCC; CO2eq avoided in the atmosphere.
II – Contribute to energy efficiency and a reduction in greenhouse gases;
III – Promote the orderly expansion in biofuels production in Brazil’s
RenovaBio | 10 Year Mandate (MM CBIOS)
energy mix; 120.00

100.00 95.7
90.7
The main instrument of RenovaBio is the establishment of annual national 79.3
85.5

decarbonization targets for the fuels industry. 80.00

66.5
72.9

58.9
60.00 50.8
42.4
Through the certification of each sugar mill or biodiesel company, each 40.00 36.0
biofuels producer has an Energy-Environmental Rating equivalent to its 24.8
mitigation of a specific quantity of GHGs in relation to its substituted fossil 20.00 14.5
fuel, measured in CO² equivalent tons. 0.4
-
  2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Target Upper Limit Lower Limit

Obrigado!
Christopher Wells
Global Head, Environmental & Social Risk