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The Santander Group is strongly committed to responsible investing. We have developed an original methodology for analysing potential investments in terms of ESG aspects (Environmental, Social and Governance issues). Our offer includes funds that take into account the impact of investments on ESG aspects, so you can choose a fund that matches your preferences.
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What is ESG?
ESG means taking into account the environmental, social and corporate governance aspects in investment decisions.
Investing in the spirit of ESG means that when we make investment decisions, we take following aspects into account:
E – Environmental
How the companies we invest in are addressing climate change and how their activities are impacting the planet through issues such as waste, pollution and deforestation.
S – Social
How businesses operate in their community. Do they take into account issues such as working conditions, health and safety, industrial relations, human rights and anti-slavery.
G – Governance
How companies approach the issues of executive remuneration, anti-corruption policies, culture of diversity, as well as political lobbying and paying taxes.
Taking ESG aspects into account in our investment decisions contributes to better risk management and to discovering new opportunities to generate value for clients and society as a whole.
ESG creates value
increases efficiency
- Better resource management (water, energy) lowers costs
- Higher employee motivation increases efficiency
reduces risk
- Taking care of the environment reduces the risk of fines and the costs of adapting to stricter regulations
- ESG controversies damage reputations and encourage customer boycotts
opens an opportunity
- Population growth, aging populations and climate change demand new, sustainable solutions
- Rapid technological advancement rewards well-managed and supervised companies
Our philosophy
Our approach to responsible investment
Exclusions
We do not invest in companies whose business is mainly focused in particularly harmful types of activity, such as:
- controversial weapons,
- non-conventional fossil fuels.
In addition, we will gradually reduce our involvement in entities engaged in coal mining and coal-based power generation until 2030.
Avoiding controversies
We do not invest in companies that do not meet the minimum requirements and standards specified by institutions such as:
- UN,
- OECD,
- ILO.
For this purpose, we conduct constant monitoring of the so-called controversies.
ESG Rating
We analyse potential and implemented investments according to our proprietary methodology and, based on it, we give the investments an ESG rating.
Engagement
We can actively use shareholder rights and influence the actions taken by the companies in which we have invested, both by voting at general meetings of investors and by constant contact with the issuer.
Thematic analysis
Some of our sub-funds aim to identify issuers that contribute significantly to the development of specific social and/or environmental issues.
Best-in-class analysis
Some of our sub-funds do not invest in companies whose ESG rating lags behind their peer groups, preferring companies with better ESG results.
ESG assessment of the portfolio
Our investment funds pursuing ESG goals must maintain the total ESG score at the required level, in accordance with the Santander Group's proprietary methodology.
Our regulations
We are aware that our investment activities have a positive or negative influence on ESG aspects. We try to minimise the negative one whenever possible. For this purpose, we apply the principles described, among other, in the following regulations:
Fund offer
In response to this increasingly important global trend, we offer sub-funds that have a positive impact on environmental or social aspects:
Santander Prestiż Global Responsible Investment
SFDR Art.8
Santander Prestiż European Equity
SFDR Art.8
Santander Prestiż Future Wealth
SFDR Art.8
Santander Prestiż Prosperity
SFDR Art.9
SFDR
On March 10, 2021, Regulation (EU) 2019/2088 of the European Parliament and of the Council of November 27, 2019 on the disclosure of information related to sustainable development in the financial services sector (SFDR Regulation) entered into force in the European Union countries. It imposes on financial market participants, including investment fund companies, the obligation to disclose information specified in this regulation, among others: by publishing them on the website.
Sustainability risks include environmental risks (e.g. exposure to climate change risks), social risks (e.g. issues of inequality, health, social inclusion, labour relations, etc.) and corporate governance risks (e.g. lack of oversight of material sustainability issues or lack of adequate business ethics policies and procedures). The occurrence of sustainability risks may lead to financial risks that have a negative impact on the value of the sub-funds' assets. These may include market risks (e.g. reduced demand for products and services due to changes in consumer preferences), operational risks (e.g. increased operating costs) or litigation risks. These risks may consequently affect the return or availability of capital to the issuer of the financial instruments constituting the sub-funds' assets and, ultimately, result in these assets revaluation / impairment.
Risks to sustainability can have a significant impact on the value of assets in the medium to long term.
Incorporating sustainability risks in the investment process is reflected in Santander TFI’s Socially responsible investment policy undefined. This policy defines the approach to sustainable and responsible investment and sets out the principles to be considered when taking ESG criteria into account in the investment process.
Complementing the above policy is the Policy of Engagement in Companies Listed on a Regulated Market and Application of Corporate Governance Measures. Based on this policy, we assess the responsibility of the business operations conducted by companies, as evidenced by the actions taken to secure and satisfy the ESG criteria. We attach great importance to the corporate governance of companies. The policy also describes the process of dialogue with companies and the rules for exercising voting rights at general meetings of shareholders.
Santander TFI continuously monitors its policies, procedures and risks to sustainability, reviewing the potential impact of these risks on sub-fund portfolios. Where a material adverse impact on a sub-fund's portfolio is identified, a review of the relevant asset will be carried out to assess its potential impact on the sub-fund's performance and the investment process and identify its weaknesses.
The types of ESG criteria taken into account in the investment process are aligned with the specific nature of the asset under analysis, so as to capture as fully as possible all elements that affect the business model and the potential for issuer's value growth. It is worth noting that already at the stage of admitting the issuers' financial instruments to the investment process, the compatibility of the potential investment with the Santander Group's current policies on sensitive sectors is checked. Based on this, it is possible to exclude a company from the investment spectrum based on the nature of its business. In addition, the Investment Department employees periodically monitor the ESG composition of Santander TFI's investment portfolios based on the Group's internal ratings and data from external providers. The way sustainability risks are taken into account is largely subjective and depends on the investment strategy of the sub-fund. With the ongoing development of legal requirements for non-financial information disclosure by issuers in the coming years, the increasing availability and standardisation of this information is expected to contribute to an even better analysis.
No consideration of adverse impacts of investment decisions on sustainability factors.
Sustainability factors mean environmental, social and labour issues, human rights and anti-corruption and anti-bribery.
With the exception of the subfunds Santander Prestiż Global Responsible Investment, Santander Prestiż European Equity, Santander Prestiż Future Wealth and Santander Prestiż Prosperity, Santander TFI does not consider principal adverse impacts of investment decisions on sustainability factors. This is dictated by the existing, noticeable at the moment, lack of sufficient disclosure data of portfolio companies as well as by the still undeveloped market practice in the area of principal adverse impacts. In the future, Santander TFI plans to consider adverse impacts of investments decisions on sustainability factors for a higher number of products - Santander TFI’s strategy in this respect adequately takes into account its size, nature and scale of activity, as well as the types of offered financial products.
Santander TFI has adopted a remuneration policy It will open in a new window in order to properly and effectively manage risk and to prevent taking risks that are inconsistent with risk profiles, investment policies, investment strategies, investment fund statutes or Santander TFI’s internal regulations. The policy is also intended to support the implementation of the strategy pursued by Santander TFI and to prevent conflicts of interest and ensure consistency with the strategy for incorporating sustainability risks in the decision-making process.
The award of variable remuneration is based on the assessment of individual performance and the performance of the business unit concerned. The assessment of individual performance results shall take into account financial and non-financial criteria, including the person's impact on incorporating sustainability risks into the business operations. The appraisal is carried out using the periodic appraisal system in force at Santander TFI.
The rules and regulations applied by Santander TFI provide for a possibility of depriving an employee of a bonus (including deferred bonuses) in the event of a breach of the employee's duties (which includes acting contrary to the applicable internal regulations), as well as in the event when the Employee is found to have engaged in unethical activities in order to obtain benefits in connection with his/her employment with Santander TFI (conflict of interest).
Our actions
We want to have a positive impact on the environment. We introduce pro-environmental measures in our company.
We give up plastic and replace bottled water with filtered tap water.
We are replacing our car fleet with a hybrid one.
We limit paper consumption.Paper consumption in 2021 compared to 2020 dropped by 42% and in 2022 - by another 38%.
We also conduct pro-social activities:
We promote the participation of our employees in initiatives that are intended, among others, to support education and the development of science, promote equal opportunities, and build a civil society.
As part of the Santander Group, we respect human rights in accordance with the highest international standards in relations with employees, customers, suppliers and communities.
To care for our employees, we provide them with the following benefits:- co-financing for professional medical care,
- subsidy for sports classes,
- life insurance,
- specialist psychological support,
- access to e-books and audio books as well as a learning platform.