The policy change

On July 3, 2025, Banco Santander (Spain) updated its Environmental and Social Risk Management Policy. The previous version of this policy document was published on March 7, 2025.

Why this is important

In April 2021, Banco Santander became a founding member of the Net-Zero Banking Alliance (NZBA) and committed to reduce the greenhouse gas emissions attributable to its lending and investment portfolios to net-zero by mid-century or sooner. A month later, in May 2021, the International Energy Agency (IEA) published its Net-Zero by 2050 roadmap for the energy sector, making clear that no new oil and gas fields nor new coal mines are needed under this pathway. The IEA confirmed this statement in the latest update of its roadmap in September 2023. Therefore, to achieve its climate goals, Banco Santander needs to exclude finance for projects and companies expanding fossil fuels.

However, according to Banking on Climate Chaos 2025, Banco Santander features among the top 25 banks that have provided most financing for top fossil fuel expanders between 2021 and 2024. Besides, the Spanish bank’s annual fossil fuel financing significantly increased in 2023-2024 compared to 2021-2022.

Scope of this scan

This policy scan will focus on the modifications introduced by Banco Santander in its Environmental and Social Risk Management Policy update from July 2025, compared to the previous version from March 2025. It will not include a full analysis of Banco Santander’s policy.

Key changes

1. Banco Santander removed some of its already-weak corporate finance restrictions for financing oil and coal companies

The new version of the policy no longer includes the commitment not to provide financing to “new oil upstream clients except for transactions for the specific financing for new renewable energy facilities”. Similarly, the policy no longer requires new clients with less than 25% of their revenues derived from coal-fired power generation to have a credible plan to align with Banco Santander’s 2030 objectives and to not expand coal power plant capacity.

 Reasons this key change is negative

• Banco Santander is now able to provide general purpose finance for “oil upstream clients” again. The real-world impact of the previous commitment was limited because of the lack of a definition of “oil upstream clients”, its limited scope (only oil and not gas) and the exception for renewable energy financing. However, it was Banco Santander’s only exclusion commitment at the client level for conventional oil. According to the Banking On Climate Chaos 2025, general corporate finance accounted for 93.6% of fossil fuel finance between 2021 and 2024, and project finance only 6.4%. This demonstrates that client-level exclusion commitments are crucial.
• The bank can now finance some companies expanding coal power generation again. According to Urgewald’s Global Coal Exit List 2024, there are 35 companies with less than 25% of revenues from coal-fired power generation that have coal power capacity expansion plans. Financing to these companies was excluded under Banco Santander’s previous policy but would now be possible.
• Banco Santander can now provide “sustainable finance” to new clients with more than 25% of revenues from thermal coal, without any guarantee that they will reduce their coal-share of revenues. For new clients with more than 25% of revenues from thermal coal power generation, Banco Santander no longer requires a robust and credible plan to reduce revenues from thermal coal power generation to 10% or below by 2030.

2. The policy includes dangerous new exceptions to Banco Santander’s 2030 coal phase-out targets

In the previous version of Banco Santander’s policy, the bank had committed by 2030 to “not directly invest in and/or provide financial products and/or services to any client with more than 10% of revenues, on a consolidated basis, directly derived from coal-fired power generation” and “to clients that own thermal coal mines worldwide”.

In the new version of the policy, these commitments are amended to allow Banco Santander to be able to provide “sustainable finance and products to finance the transition” to these clients, including after 2030. Regarding clients owning thermal coal mines, Banco Santander now states that “financing at parent level is still possible if the funds are not used to finance thermal coal assets and/or to any subsidiary that directly engages with thermal coal activities. If it is proven that financing goes to thermal coal, we will engage with the client to find a solution”.

 Reasons this key change is negative

• Banco Santander will now be able to provide “sustainable finance” to coal power companies after 2030. In February 2021, Banco Santander announced its first 2030 decarbonisation targets. This included the commitment to stop providing financial services to power generation clients with more than 10% of revenues dependent on thermal coal and to eliminate all exposure to thermal coal mining worldwide. It means that the bank’s clients exposed to coal would have had almost ten years to adapt their business model to maintain their relationship with Banco Santander after 2030. Otherwise, these clients would not be aligned with the Paris Agreement, and the bank would not finance them. However, with this policy update, the bank has created a loophole with which it can continue to finance these clients.
• Banco Santander is weakening its policy to continue financing clients that are not aligned with the Paris Agreement by 2030, rather than cut ties with them. This policy change actually shows the failure of the bank’s engagement strategy. Indeed, if the bank’s coal clients had started to transition when the policy was announced, they could have aligned with Banco Santander’s targets in order to maintain the relationship after 2030. Nevertheless, the fact that the bank is already changing its policy five years before this deadline indicates that some of its coal clients will not be able to align with its 2030 targets, and that an exception for sustainable finance is the only way that could make the relationship continue after 2030.
• Last but not least, the fact that the exception is about “sustainable and transition finance” does not make it acceptable. Firstly, it would be inconsistent with Banco Santander’s climate objectives if the bank continues to provide “transition finance” to clients that already proved that they were not able to align with the Paris Agreement objectives by 2030. Secondly, although the previous version of its policy included exceptions to allow finance for “new renewable energy facilities”, the new policy’s broader exception for “sustainable finance” could allow financing for false solutions to the climate crisis, such as carbon capture use and storage or biomass, that are not compatible with a just energy transition. Thirdly, “sustainable finance” only makes sense when it is used to help a client transition away from fossil fuels, not if it supports sustainable projects of a fossil fuel client that is not on a credible transition pathway. Fourthly, the fact that Banco Santander already anticipates that such financing could be misused and go to thermal coal demonstrates the complexity of “sustainable” financing of fossil fuel clients.

Conclusion - Banco Santander is increasing fossil fuel financing and is now backtracking on previous commitments

Banco Santander’s new policy is a significant step backwards compared to its previous public commitment. Indeed, the Spanish bank is turning its back on its previous commitment not to provide general-purpose finance to upstream oil companies, and to stop financing clients with more than 10% of revenues derived from coal-fired power generation or that own thermal coal mines by 2030.

It is also opening the door to financing “sustainable” and “transition” projects being developed by coal clients without a credible transition plan, which risks supporting companies that are not Paris-aligned as well as supporting false solutions like carbon capture.

Banco Santander’s previous policy was far from being sufficient to align with the bank’s net-zero by 2050 and the Paris Agreement objectives. The commitments were mostly at project finance level, and some sectors such as midstream oil and gas infrastructure were crucially missing from the policy document. Our findings in the Banking on Climate Chaos report show that the bank was able to increase its financing to fossil fuel companies with expansion plans, despite its previous policy. It is alarming that Banco Santander has further reduced the already low ambition level of its sector commitments.

BankTrack therefore urges Banco Santander to immediately remove the new exceptions to its 2030 coal targets; to reintroduce the commitment on oil and coal finance that were removed; and to live up to its net-zero commitments by immediately ceasing financing for any companies developing new coal, oil and gas projects, and phasing out its remaining fossil fuel finance in line with the IEA’s Net Zero by 2050 scenario.

Further resources

IEA, Net Zero Roadmap: A Global Pathway to Keep the 1.5ºC Goal in Reach, 2023 Update

Banking on Climate Chaos 2025

United Nations’ high-level expert group on the net-zero emissions commitments of non-state entities: Integrity matters report