debuts ESG play with environmental and social impact

Santander

Santander has launched its first ESG structured product aimed at protecting capital and generating positive environmental and social impact, SRP has learnt.

The product which has been sold to a company from the Aragon region is a 50/50 type of structure offering a guaranteed minimum return on part of the capital invested and an additional variable return linked to the performance of the Eurostoxx 50 ESG X index.

The index includes European companies with the highest ESG scores and excludes those that do not meet international standards, such as tobacco companies, arms companies, military contracting, or thermal coal companies.

The Spanish bank has committed to use part of the proceeds to reforesting 3.75 hectares in Albentosa (Teruel) close to the location of the company’s headquarters, to generate an additional positive environmental impact. The land, owned by the town council, will be reforested with around 3,000 trees to create a native forest.

Santander will assume all the costs as part of its goal to mobilise €120 billion between 2019 and 2025 in green financing. The project will also have a positive social impact as additional employment will be generated for the reforestation work.

The bank restructured its Green Finance division in Q2 2022 to increase the weight to its sustainable finance business by bringing the business related to investment banking (issuance of green bonds or equity investments) and sustainable financing offered by commercial banking (green finance products) under the same unit.