Banco Sabadell

The governance system and the organisation of the different decision-making levels are both being continuously improved and adapted to the needs that are emerging from the new sustainability environment.

Board of Directors

With the exception of matters reserved to the Annual General Meeting, Banco Sabadell's Board of Directors is the most senior decision-making body of the company and its consolidated Group as it is responsible, by law and pursuant to the Articles of Association, for the management and representation of the Bank. The Board of Directors acts mainly as an instrument of supervision and control, delegating the management of the Institution's ordinary business matters to the Chief Executive Officer.

The Board of Directors is subject to well-defined and transparent rules of governance, in particular to the Articles of Association and the Regulation of the Board of Directors, and it conforms to best practice in the area of corporate governance. To ensure better and more diligent performance of its general supervisory duties, the Board is directly responsible for approving the Institution's general strategies. It also approves its policies and is therefore responsible for establishing principles, commitments and objectives in the area of sustainability, and for including them in the Institution's strategy.

As at 31 December 2024, the Board of Directors is made up of fifteen members. Of these, two are Executive Directors (13.33% of the total Board) and thirteen are Non-Executive Directors, while ten are Independent Directors (66.67% of the total Board), two are Other External Directors (13.33% of the total Board) and one is a Proprietary Director (6.67% of the total Board). There is no trade union representation on the Board.

As at 2024 year-end, there were six female directors, including five female Independent Directors out of a total of ten Independent Directors and one female Other External Director. Women represent 40% of the full Board of Directors, thus bringing forward the fulfilment of the Bank's commitment stated in Sabadell's Commitment to Sustainability and achieving early compliance with the provisions of Organic Law 2/2024 of 1 August on equal representation and balanced presence of women and men.

When defining the general strategy, the business objectives and the risk management framework of the Institution, the Board of Directors considers aspects related to sustainability, including climate-related, environmental, social and governance risks, and it also effectively oversees them.

In April 2024, the Board of Directors revised its Sustainability Policy, which incorporates ESG parameters into the activities and organisation of Banco Sabadell Group. This policy establishes the core principles that guide Banco Sabadell Group in its task of addressing the challenges of sustainability, defining the management parameters, as well as the organisation and governance structure needed for its correct implementation.

In relation to the management and control of environmental risk, the Board is ultimately responsible for embedding it into the general strategy and for establishing the necessary mechanisms for its review. Its duties range from monitoring environmental risk to approving and reviewing the organisational and functional framework for managing, controlling and reporting on this risk, approving the associated policies and reviewing them on an annual basis. Lastly, it is worth noting that the Board of Directors has received specific training on climate risk management, the impact deriving from those risks, policies and regulations in that regard, as well as measurement metrics such as the carbon footprint and decarbonisation pathways.

Board Committees

The Board Strategy and Sustainability Committee was set up in 2021 and is chaired by the Chairman of the Board of Directors, in the capacity of Other External Director. It is formed of five Directors: three Independent, one Other External and its Chair. This Board Committee met 15 times in 2024.

This Board Committee is responsible for analysing and reporting to the Board of Directors on environmental risk policies and for reporting to the Board of Directors on any amendments or periodic updates of the environmental risk strategy. It is also responsible for supervising the model for identifying, controlling and managing risks and opportunities in relation to sustainability including, where applicable, environmental risks.

The Board Strategy and Sustainability Committee carries out regular monitoring of the Institution's progress in ESG matters through the review of the Corporate Sustainability Report, which contains information about the overall ESG environment in the context of the macroeconomic and regulatory environment, and about the Institution's ESG outlook, the integration of ESG risks into management arrangements and the priority indicators of Sabadell's Commitment to Sustainability.

With regard to sustainability, the Board Committee has the following duties:

• Analyse and inform the Board of Directors about the Institution's sustainability and environmental policies.

• Inform the Board of Directors of any modifications or regular updates of the sustainability strategy.

• Analyse the definition and, where applicable, amendment of policies on diversity and integration, human rights, equal opportunities and work-life balance and evaluate the level of compliance therewith on a regular basis.

• Review the Bank's social action strategy and its sponsorship and patronage plans.

• Review and report on the Sustainability Report prior to its review and reporting by the Board Audit and Control Committee and its subsequent sign-off by the Board of Directors.

• Receive information in connection with reports, documents or communications from external supervisory bodies within the scope of responsibility of this Board Committee.

Other Board Committees are involved to various degrees in the sustainability governance arrangements:

Board Appointments and Corporate Governance Committee: took on duties in relation to the disclosure of internal corporate policies and regulations, the oversight of rules on corporate governance, and the relationship with shareholders and investors, proxy advisers and other stakeholders. This Board Committee is formed of three Independent Directors and one Other External Director.

Board Audit and Control Committee: oversees the process to prepare and submit regulated financial and non-financial information and escalates to the Board of Directors recommendations or proposals intended to safeguard its integrity. This Board Committee is formed of four Independent Directors, its Chair being an audit expert.

Board Risk Committee: oversees the implementation of the Institution's Global Risk Framework Policy and is responsible for advising and supporting the Board of Directors with regard to the monitoring of the Bank's risk appetite and general risk strategy. This Board Committee is formed of four Independent Directors.

Internal Committees

The Management Committee regularly monitors the Sustainable Finance Plan and any updates to the regulatory framework. It is also in charge of overseeing the aforesaid plan and resolving any incidents.

The Sustainability Committee, created in 2020 and chaired since 2021 by the General Manager and head of the Sustainability and Efficiency division, is the body responsible for establishing the Bank's Sustainable Finance Plan and for monitoring its execution, for defining and disclosing the general action principles in the area of sustainability and for promoting the development of projects and initiatives. It is made up of 11 members and it meets once a month. The Sustainability Committee met 11 times in 2024.

Organisation

The Sustainability and Efficiency division was created in 2021 and is the unit responsible for defining and managing Banco Sabadell Group's responsible banking strategy, including the cross-cutting implementation of ESG criteria across all of the Bank's business units, affiliates and subsidiaries. The Sustainability and Efficiency Director is a General Manager who forms part of the Institution's Management Committee and reports directly to the Chief Executive Officer.

At the end of 2024, certain internal organisational changes were approved, applicable as from 1 January 2025, as a result of which the Sustainability division is to be integrated within the People division. The Director of the People and Sustainability division is a General Manager who forms part of the Institution's Management Committee and reports directly to the Chief Executive Officer.

The Bank is organised according to the system of the three lines of defence, and each line has teams dedicated to Sustainability-related matters:

• First line of defence: business areas have been reinforced by setting up specific units that coordinate with commercial teams to create sustainable financing solutions for customers. Risk teams have also been expanded to perform ESG functions in portfolio risk management.

• Second line of defence: new members have been added to the Compliance, Credit Risk Control, Internal Control and Models Validation teams to reinforce the second line of defence.

• Third line of defence: teams were also enlarged to take on audit functions related to governance processes, risk management activities and internal control in the area of sustainability.

The material Impacts, Risks and Opportunities (hereinafter, IROs) have been identified using the double materiality analysis and are set out in detail in section 3.3 SBM-3: Material impacts, risks and opportunities and their interaction with strategy and business model. In this respect, the material IROs have been grouped into a total of six topics: Climate change mitigation and adaptation, Energy, Own workforce, Access to products and services and non-discrimination, Cybersecurity and data protection, and Business conduct. In this vein, the Management Committee is the highest level executive committee and is regularly informed of material impacts, risks and opportunities at top-level committee meetings.

The governance process for each of the above-mentioned topics is described below:

Climate change mitigation and adaptation

All matters related to climate change (mitigation and adaptation) are regularly reviewed by the Sustainability Committee. The Management Committee, for its part, engages in regular monitoring of the Sustainable Finance Plan and updates to the regulatory framework.

As for the Board Committees, in relation to that to which each topic refers:

• Board Strategy and Sustainability Committee: Carries out regular monitoring of the Institution's progress in ESG matters through the review of the Corporate Sustainability Report

• Board Risk Committee: One of the main responsibilities of the Board Risk Committee is that of putting forward the proposed Risk Appetite Statement (RAS) to the Board of Directors for its approval. The RAS has been strengthened through the inclusion of new environmental risk metrics linked to credit risk.

• Delegated Credit Committee: Approves or reports favourably to the Board of Directors on decisions concerning credit risk acceptance, ensuring that companies take sustainability indicators into account through ESG guidelines compliance and IRCA ranking.

• Board Audit and Control Committee: Has monitored and analysed the sufficiency, clarity and integrity of all financial and related non-financial disclosures published by the Bank.

• Board of Directors: Responsible for approving the Institution's policies, for establishing principles, commitments and objectives in the area of sustainability, and for including them in the Institution's strategy.

Energy

Compliance with the commitments under the ESG framework, which include those related to the Institution's energy efficiency, is reported to the Sustainability Committee on an annual basis. The Sustainability Committee also validates proposals for improvements to the energy efficiency of the Institution's facilities, while the corresponding budget is approved by the Management Committee.

Own workforce

The top-level committee of the People division is the body in charge of supervising the strategy and direction of decisions that have an impact on staff. The monitoring and control of gender representation and the gender pay gap is a priority for the People division and is regularly reviewed by the unit's top-level committee. The People division conveys outcomes to various forums:

• Board Committees (Board Remuneration Committee, Board Appointments and Corporate Governance Committee, Board Strategy and Sustainability Committee): report on remuneration models and action levers to reduce the gender pay gap.

• Management Committee: validates annual targets for female representation embedded in the sustainability indicator.

• Managerial Performance Evaluation Committee (MPEC) and Divisional Employee Appraisal Committee (DEAC): meet annually to decide on senior management staff changes and verify compliance with gender diversity targets.

Access to products and services and non-discrimination

Before marketing a new product or service, an internal workflow ("Product Workflow") is followed, with validation ultimately ratified by the Technical Product Committee.

Regarding Sogeviso, the Committee for Service Businesses monitors the social support programme and Jobs scheme once a fortnight, tracking management indicators such as labour market insertion rates and social housing rental contract renewals.

Cybersecurity and data protection

The Information Security function sends regular cybersecurity status reports to governing bodies, such as the Management Committee, the Board Strategy and Sustainability Committee and the Board of Directors. For Data Protection, annual plans and semi-annual monitoring reports are submitted to the Management Committee and Board Risk Committee.

Business conduct

The Corporate Ethics Committee (CEC), reporting to the Board of Directors, is ultimately responsible for adopting policies on corporate reputation and ethical behaviour. Its core mission is to promote the ethical behaviour of the entire organisation to ensure compliance with various codes and policies including the Code of Conduct, Internal Code of Conduct relating to securities markets, Corporate Crime Prevention Policy, General Policy on Conflicts of Interest, Anti-Corruption Policy and Policy on Internal Reporting System and Protection of Reporting Persons.

Banco Sabadell Group's Remuneration Policy is consistent with the goals of the risk and business strategy, the corporate culture, the protection of shareholders, investors and customers, the values and long-term interests of the Group, as well as with customer satisfaction and the measures taken to prevent conflicts of interest without providing incentives for excessive risk-taking.

Banco Sabadell Group's Remuneration Policy is based on the following principles:

1. Promote business and social sustainability in the medium-long term and ensure alignment with Banco Sabadell Group's values. This involves: • Aligning remuneration with shareholders' interests and with the creation of long-term value. • Implementing rigorous risk management, considering measures to prevent conflicts of interest. • Aligning with Banco Sabadell Group's long-term business strategy, objectives, values and interests.

2. Ensure a competitive and fair remuneration system (external competitiveness and internal fairness) that: • Is able to attract and retain the best talent. • Rewards professional experience and responsibility, irrespective of the employee's gender. • Is aligned with market standards and is flexible.

3. Reward performance, thereby aligning remuneration with individual results and the level of risk taken: • Finding an adequate balance between the various remuneration components. • Considering current and future risks and results, without providing incentives for excessive risk-taking. • Implementing a simple, transparent and clear-cut remuneration scheme.

In terms of sustainability, the following aspects are taken into consideration:

• The remuneration policy and practices integrate sustainability risks and information is published on the Group's website. The remuneration policy and practices encourage behaviour consistent with the Group's risk-based approaches related to climate and the environment, as well as with voluntarily undertaken commitments. They promote a long-term approach to the management of climate-related and environmental risks.

• Remuneration components must contribute to the promotion of environmental, social and governance actions in order to make the business strategy sustainable and socially responsible.

Variable remuneration will be linked to results, combining: • Results of the Group, entity, business unit or division and/or those of the employee. • Both financial and non-financial criteria, aligned with strategic planning, budget and risks taken or indicators in the fields of environment, society, diversity and gender equality. • Multi-year targets based on quantitative criteria linked to a period long enough to properly reflect the risk taken.

Synthetic Sustainability Indicator (SSI)

Within the Group's objectives, the Synthetic Sustainability Indicator (SSI) has a weight of 10% in employees' variable remuneration and includes ESG metrics and indicators. In the case of the Executive Directors, this indicator has a weight of 14% for the CEO and 13% for the CRO.

Furthermore, to reinforce the alignment of remuneration with the Group's sustainability commitment, in 2023 a synthetic sustainability indicator was included in the multi-year targets set by the Group, directly linked to long-term remuneration, weighted at 20%.

For the period 2024-2026 the multi-year target indicators are: • Shareholder value creation (relative Total Shareholder Return or TSR), weighted at 40% • Profitability (Return On Tangible Equity or ROTE), weighted at 40% • Sustainability (synthetic sustainability indicator), weighted at 20%

Additionally, some job functions have been assigned sustainability targets as part of their individual targets.

Banco Sabadell Group annual and multi-year targets, their weighting and their scale of achievement will be approved by the Board of Directors, based on a proposal by the Board Remuneration Committee.

The Group takes into account sustainability risks in its assessment, management and control processes through the activities carried out.

In this respect, Banco Sabadell Group has a Sustainability Policy, which aims to provide a framework for all of the Institution's activity and organisation within ESG parameters. The Policy incorporates environmental, social and governance factors in decision-making and, at the same time, based on those factors, it responds to the needs and concerns of all of its stakeholders. The Sustainability Policy sets out the core principles on which the Group bases its approach to tackling the challenges of sustainability, and defines the corresponding management parameters, as well as the organisation and governance structure required for their optimal implementation.

Effective integration of environmental, social and governance risks into management arrangements requires a strategy and set of regulations that establish the guidelines, targets and limits required at different points of the credit approval workflow. The Bank therefore attaches great importance to the assessment of the climate-related and/or environmental, social and/or governance risks of its counterparties.

In terms of social risks, various social factors are considered, such as those related to rights, well-being, and the interests of people and communities. The risk of loss arising from any negative financial impact on counterparties stemming from the current or prospective impacts of social factors is also included. To that end, a series of actions linked to the process for identifying, measuring and managing social risk for both retail and business customers have been implemented.

The Group therefore has an Environmental and Social Risk Framework that consolidates the set of applicable criteria (sectoral standards) that are intended to limit the financing of customers or projects that the Institution considers to be contrary to the transition to a sustainable economy or that lack alignment with international regulations or best practices in the industry.

The Framework also integrates compliance with the rules and standards at the level of social risk, some sector-specific and others of general application, such as the International Labour Organisation (ILO) Conventions and the UN Guiding Principles on Business and Human Rights. The general exclusions limiting the financing of companies with a high level of social risk are:

a. Companies for which Banco Sabadell has sufficient reason to believe that they employ child labour or forced labour, as defined in the ILO conventions, or that have participated in human rights violations and/or that do not follow the principles of the Institution's human rights policy.

b. Companies involved in the resettlement of indigenous or vulnerable groups without their free, prior and informed consent, or that otherwise infringe the rights of those groups.

c. Companies for which Banco Sabadell has sufficient reasons to believe that they are in material breach of applicable laws and regulations in relation to human rights and the environment, even if the circumstances in question do not constitute a breach of the local legislation of each country.

d. Companies that do not have health and safety policies in place to protect their workers, such as OHSAS 18001 or ISO 45001.

On the other hand, the Group has a Human Rights Policy and a related Due Diligence Procedure, both approved in 2021, which are reviewed annually and are applicable to all Group companies. They establish basic principles of action, as well as the mechanisms required to identify, prevent, mitigate and/or remedy any potential negative impacts on human rights that the Bank's activities and processes may entail, in particular with regard to granting finance to companies, or in relation to its human resources management model or supplier engagement processes. They also establish the need for employees to receive training in all of these areas.

The Group also has a new version of the Group Code of Conduct, first approved in 2021 by the Board of Directors, which underwent an in-depth review to adapt it to regulatory requirements, supervisory guidelines and specifications, and to market standards. Every member of the Group's workforce was required to read and expressly accept the new version of the Group's Code of Conduct.

The main function of the Internal Controls over Sustainability Reporting (hereinafter, ICSR) unit is the design and implementation of the general control framework corresponding to Banco Sabadell Group's Sustainability Report.

This includes the identification of significant quantitative data generation processes involved in generating the quantitative information contained in the Sustainability Report. A data generation process is considered to be one which generates quantitative indicators associated with the Impacts, Risks and Opportunities (IROs) stemming from the double materiality analysis and one which comprises common elements, such as a data origination source and the processing and analysis of those elements prior to final disclosure.

The ICSR unit analyses those data generation processes, through a thorough analysis with the expert areas involved, and identifies the risks associated with those processes, which are related to the content of the Comisión Nacional del Mercado de Valores (CNMV) guidance that serves as the frame of reference, and controls are designed and incorporated, jointly with those responsible for the data, to mitigate the previously identified risks.

The resulting matrix of risks and controls provides a holistic view of the processes and systems involved in producing the Sustainability Report. The matrix can be consulted to identify the executor and the reviewer of the control, the data that it covers and the process to which it belongs, among other fields.

Furthermore, with the entry into force of the new European Corporate Sustainability Reporting Directive (CSRD), the ICSR unit has identified risks and designed controls over the new double materiality exercise in order to ensure the correct execution of this exercise and its completeness.

Based on the above-mentioned Directive, content controls have been established over the qualitative information disclosed throughout the Sustainability Report in relation to policies, actions, metrics and targets, as these are considered to constitute sensitive information and there are risks involved in their disclosure to the markets.

With regard to the assessment of the established controls, which mitigate the associated risks through their prevention or detection, this is carried out using the Bank's Governance, Risk and Compliance (GRC) tool, which is managed by the ICSR unit, where the areas responsible complete assessment forms accompanied by evidence supporting each of the controls.

Having completed the assessment, the GRC tool managed by the ICSR unit has a certification module that can be accessed by members of Senior Management. The certification process is based on the hierarchical and organisational ratification, at three levels, of the result achieved in the assessment of the controls.

The Board of Directors delegates the supervisory function regarding the internal control systems to the Board Audit and Control Committee. Every six months, the current situation of the ICSR as a result of new applicable regulatory requirements is reported to the Board Audit and Control Committee and to the Technical Committee on Accounting and Financial Disclosures. In addition, every year after the end of the tax year, the result of the assessment of the controls and the conclusions derived from it are escalated to the Board Audit and Control Committee.

The Institution's business model is geared towards profitable growth that generates value for shareholders. This is achieved through a strategy of business diversification based on criteria related to profitability, sustainability, efficiency and quality of service, together with a conservative risk profile, while maintaining high standards of ethics and professional conduct combined with sensitivity to the interests of all stakeholders.

The Group's strategy promotes sustainable financing and investment to drive forward the transition towards a more sustainable model and a low-carbon economy, offering customers and investors the best possible solutions. Thus, the Bank committed to mobilise €65bn in sustainable finance between 2021 and 2025. Up to December 2024, more than €57.9bn had been mobilised, €19bn of them during this year.

Sustainable financing solutions:

1. Corporate & Investment Banking (CIB)

As at the end of 2024, the Bank had taken part in 112 sustainable financing and investing transactions in the area of CIB:

Corporate Banking: 92 transactions were signed for a total of 2,873 million euros, increasing by 41% compared to 2023. Of these, 50 transactions amounting to 1,298 million euros are considered green and social loans, and 42 sustainability-linked loans were carried out amounting to 1,575 million euros.

Investment Banking: In 2024, Banco Sabadell was the placement entity of green and sustainability bonds in the primary debt market, participating as Joint Lead Manager in public issuances including: • Basque government: sustainability bond of €600 million • Madrid autonomous community: sustainability bond of €1 billion • Xunta de Galicia: sustainability bond of €500 million • Junta de Andalucía: sustainability bond of €500 million • FCC Servicios de Medioambiente: sustainability bond of €600 million

Project Finance: Over the year, 39 projects received a total of 1,228 million euros in finance. According to Infralogics, the Bank featured in the ranking of banks that provide finance for renewable energy projects in Spain and Portugal, ranking second in terms of number of transactions and third in terms of volume of transactions.

2. Business Banking

Green and social loans: In 2024, more than 4.1 billion euros were mobilised through companies using the funds for purposes aligned with the Bank's Sustainable Financing Framework.

Sustainability-linked loans: As at the end of 2024, the Bank had mobilised more than 3 billion euros in sustainability-linked loans for corporates and SMEs to fund green purposes only.

Sabadell Renting's mobility solutions: In 2024, ECO vehicles (hybrid and electric vehicles) accounted for 67% of all vehicles on offer, while the number of new contracts signed for ECO vehicles as a percentage of the total was 43%.

Social loans: In 2024, SMEs and micro-entities were granted more than 2.8 billion euros in finance. This brings the cumulative amount granted between 2021 and 2024 to over 11.5 billion euros, representing 77% of the target set for the 2021-2025 period of 15 billion euros. Out of all SMEs and micro-entities that received financing in 2022, over 68% maintained or increased their number of employees and over 73% improved their sales volumes. In relation to financing granted in 2024 to self-employed professionals, 46% was granted to women.

3. Retail Banking

Green financing solutions for individuals: • Green mortgages: In 2024, the volume of new mortgages with sustainable certification came to more than 589 million euros • Sabadell green renovation loan: financing for home renovations that improve sustainability and energy saving capacity • Sabadell green car loan: for purchasing 'zero emissions' or 'ECO' labelled vehicles • Renting mobility solutions: ECO or green vehicles offered to retail customers

Social financing solutions for individuals: • Basic Payment Accounts: 580 Basic Payment Accounts were opened in 2024 including 70 opened by vulnerable customers • Benefits for customers aged 65 or over • Customer service model particularly mindful of vulnerable customers • Code of Good Practice applied when granting financing transactions

4. Sustainable savings and responsible investment solutions

As at 2024 year-end, 24 Sabadell Asset Management funds (€8,303 million) promoted environmental or social characteristics (Article 8 funds under SFDR). Combined with Amundi mutual funds distributed by Banco Sabadell (€5,717 million), €14,020 million or 84% of Banco Sabadell customer assets invested in non-guaranteed funds promote environmental or social characteristics or have environmental or social objectives.

BanSabadell Pensiones currently manages nine pension funds that explicitly incorporate a Socially Responsible Investment (SRI) mandate in their investment policy, with assets of 1,006.1 million euros as at 2024 year-end.

5. Issuance of Banco Sabadell sustainability instruments

In 2024, Banco Sabadell issued two green bond deals amounting to a total of 1 billion euros. With these deals, Banco Sabadell now has nine outstanding green bond deals amounting to a total of 4,445 million euros. On 21 June 2024, the first green synthetic securitisation was carried out on a project finance portfolio of 1.1 billion euros.

6. Sinia Renovables

As at 2024 year-end, Sinia Renovables has investments in projects with an overall installed capacity of 1,645 MW, equivalent to the electricity consumption of about 1,164,577 households. Of this capacity, the portion attributable to Sinia through its direct shareholding is 271 MW, equivalent to the generation of 619 GWh of sustainable electricity every year. In 2024, Sinia Renovables mobilised more than 37.7 million euros, between invested capital and financing.

7. Green financing in Mexico

In 2024, Banco Sabadell Mexico granted green financing in the amount of approximately €135m. The Bank has access to lines of credit including a $100m facility from the International Finance Corporation (IFC) and a $50m credit facility with the German Development Finance Institution (DEG).

Banco Sabadell Group is firmly committed to ensuring sustainability across all its dimensions and, as a financial institution, it is aware of the important role that it plays in its economic, social and environmental surroundings, fostering care for the environment, supporting social progress and upholding a model of good governance, aligned with international best practice.

The Group, in keeping with its commitment, has been conducting materiality assessments of topics related to sustainability, aligning with best practice in relation to sustainability and transparency. Specifically, in 2022, the double materiality approach was included for the first time and the concept of impact included in the 2021 review of GRI standards was introduced.

In line with this development and with the entry into force of the new European Corporate Sustainability Reporting Directive (CSRD), a new double materiality exercise has been carried out in order to identify the material impacts, risks and opportunities related to sustainability. Under the double materiality approach, this exercise includes assessing the effect of different sustainability topics from two points of view:

1. Impact materiality: referring to the Bank's effects on the environment and society through its activities, both directly and indirectly.

2. Financial materiality: referring to the effects of the environment and society on the Bank's financial position.

Methodological phases:

The methodological performance of the double materiality analysis carried out comprises four key phases:

1. Definition of the perimeter under analysis
2. Impact materiality assessment
3. Financial materiality assessment
4. Definition of materiality thresholds

Definition of the perimeter under analysis:

a. The key sustainability topics for the Institution:

To identify the possible material topics to be evaluated in the double materiality exercise, an analysis was carried out to identify those topics that are, in principle, more important for the Institution from an ESG perspective. The topics referred to in the ESRS were comprehensively analysed, in addition to the topics deemed to be material in previous materiality exercises and the Principles for Responsible Banking, among others.

b. Stakeholder groups to be involved in the exercise:

The Bank's main stakeholder groups were identified. The groups identified for the double materiality exercise were the following:

• Financial Community: investors, shareholders and rating agencies • Employees: Banco Sabadell Group workforce • Suppliers: main suppliers that might be more affected by ESG topics • Customers: retail and business customers • Bodies and Institutions: regulators of the domestic and European framework • Society: citizens, communities and organised civil society • Peers: comparable institutions in the sector

After identifying the stakeholder groups, channels to listen to what they had to say were determined. In the case of suppliers, employees, retail banking customers and business banking customers, questionnaires were sent out through surveys. To determine the number of responses needed to be considered statistically significant, the smallest representative sample of each sample universe was calculated, considering a confidence interval of 95%.

For the General Management stakeholder subgroup, a total of 20 interviews were held with managers from different areas of the Bank.

The way in which the Institution's strategy has embedded material topics for its stakeholder groups is described in detail in the sections included for that purpose in the material disclosures:

• 5.1.3. Strategy (in relation to climate change) • 5.2.2. Strategy (in relation to own workforce) • 5.3.2. Strategy (in relation to consumers and end-users) • 5.4.2. Strategy (in relation to business conduct) • 5.5. Entity-specific disclosures: Tax responsibility

The results of the double materiality analysis, as well as the process and methodology applied, were reported to the Sustainability Committee, the Management Committee and to the Board Audit and Control Committee of the Institution. The double materiality analysis also underwent an ESRS readiness audit carried out by the Bank's third line of defence in 2024.

As a result of the double materiality exercise, the following material impacts, risks and opportunities have been identified:

Material Impacts

Material Risks and Opportunities

Double materiality analysis results

The table below shows the results of the double materiality analysis, indicating the sustainability topics analysed (ESRS) with their relative weight or importance in terms of materiality:

Following the analysis, Banco Sabadell concluded that the current risks identified in the double materiality analysis currently produce no significant effects. This conclusion was reached after evaluating the impact that they currently have on the Bank's financial statements, having verified that they have no material significance.

In relation to current opportunities, including those related to sustainable finance solutions and climate transition advice, as well as digital customer acquisition and cross-selling opportunities, it was concluded that they have material significance and the Institution is working to benefit from them.

Thus, the Bank committed to mobilise €65bn in sustainable finance between 2021 and 2025. Up to December 2024, more than €57.9bn had been mobilised. As a result of the digitalisation strategy, over 150,000 customers were onboarded digitally in 2024.

Specific qualitative analysis of the financial materiality of environmental risks

Every year, the Institution reviews the impact materiality assessment of environmental risks (physical and transition risks stemming from climate change and environmental degradation), identifying all possible factors that can transmit these risks, evaluating them according to a scale of impact intensity and taking different time horizons into account.

The qualitative materiality analysis for 2024 showed that:

• Physical risks: acute climate events continued to occur and chronic climate trends continued to get worse, with a noticeable "tropicalisation" of the climate • Transition risks: remained stable compared to 2023, with a certain decrease of regulatory transition risks

The results showed that the risk with the biggest effect continued to be credit risk:

• Credit risk: Physical risks are expected to increase impact intensity over the time horizon considered. Transition risks are estimated to have a gradually increasing overall impact on counterparties • Market, liquidity and operational risks: The impact intensity of inherent environmental risks is low

Inherent risk results of the 2024 qualitative environmental risk assessment

After considering the rollout of mitigating factors and the initiatives of the Institution's Sustainable Finance Plan, the residual environmental risk is concluded to be low for all of the risks under analysis.

Identification and assessment of impact materiality

The double materiality analysis identified the main positive and negative impacts related to each sustainability-related topic that the Bank has or could have on society and the environment. Each of them are assessed according to their characteristics through the scale, scope, irremediable character and likelihood, the scale being the severity or benefit of the impacts on the environment and society, as well as the time horizon of potential negative impacts. In the case of a potential negative impact assessed as impacting human rights, severity prevails over likelihood.

During the assessment exercise carried out, 1,612 participants, broken down according to the chart below, were actively involved through ad hoc questionnaires and interviews with General Management:

Involvement of stakeholder groups

The Bank's General Management has been involved in both the assessment of impact materiality (scale, irremediable character and likelihood, since the scope of the impact is set by means of an internal analysis) and of financial materiality (financial effects, likelihood and trend over time). On the other hand, retail customers, business customers, employees and suppliers took part in the impact materiality assessment through an analysis of the scale.

In that regard, 56 impacts were identified, which were assessed under the impact materiality perspective.

Identification and assessment of financial materiality

First, the main risks and opportunities of each sustainability-related topic that affects or could affect the Bank's financial statements were identified. These risks and opportunities were assessed in the short, medium and long term through their financial effects and likelihood of occurrence.

This assessment identified 42 risks and 21 ESG opportunities, which were assessed under the financial materiality perspective.

Definition of materiality thresholds and results

Based on the chart analysis of the normal distribution of the results obtained in the assessments of impact materiality and financial materiality, the Impacts, Risks and Opportunities (IROs) that stand out from the entire sample have been identified. The IROs belonging to the group of scores that are above the rest are classified as "material impacts, risks and opportunities".

Internal control processes for the double materiality analysis

As described in section "2.5 GOV-5. Risk management and internal controls over sustainability reporting", the Internal Controls over Sustainability Reporting (ICSR) unit identified risks and designed controls over the new double materiality exercise in order to ensure the correct execution of this exercise and its completeness.

The Board of Directors delegates the supervisory function regarding the internal control systems to the Board Audit and Control Committee. Every six months, the current situation of the ICSR as a result of new applicable regulatory requirements is reported to the Board Audit and Control Committee and to the Technical Committee on Accounting and Financial Disclosures.

Assessment of environmental degradation, social and governance risks

In addition to climate risk, the Institution assesses and monitors environmental degradation, social and governance risks. The Institution, through its own operations, does not cause any negative impacts worthy of mention in the areas of biodiversity, ecosystems or natural resources. Its stock of physical assets is located in urban hubs, away from ecosystems and biodiversity-sensitive areas.

The quantitative assessment of environmental risk materiality that the Institution carries out regularly considers that banking activity has a "Low" impact on the various vectors (air, soil, biodiversity and water) and a very limited impact on waste. This analysis is based on the sector mapping tool of the United Nations Environment Programme Finance Initiative (UNEP FI).

However, the Institution is exposed to potential non-climate-related environmental risks through its suppliers. Therefore, the Institution has several policies and procedures in place, such as: • Procurement Policy • Policy on the Outsourcing of Functions • Supplier Code of Conduct

The Institution carries out an assessment of various environmental aspects with tools that provide relevant information to decide whether or not to engage certain suppliers, through questionnaires based on the "statement of responsibility" of the supplier. Examples include:

• General ESG: whether the supplier has an Environmental Management System or publicly disclosed environmental policy • Biodiversity and climate: whether it promotes actions that minimise impact on biodiversity • Waste and circularity: whether it quantifies waste and has improvement objectives • Water resources: whether it calculates a water footprint indicator

The Institution has outlined a dual objective for 2025: • For 80% of its relevant suppliers to have an ESG score (already achieved) • For 90% of billing with these suppliers to be with those that have the highest scores (A+, A or B)

Environmental degradation risk of the loan book

The Bank conducts an assessment of its exposure to the risk associated with environmental degradation of the business risk portfolio, based on the United Nations Environment Programme Finance Initiative (UNEP FI) methodology. This methodology assigns an environmental impact to each NACE code, obtained by consolidating five non-climate-related environmental factors:

• Management of water resources • Impact on biodiversity • Pollution and use of land • Air quality • Management of resources and waste

1.3% of the business exposure is classified as having "Very High" environmental degradation risk and 10% as "High" risk. The portfolio classified as having "High" and "Very High" risk remained stable compared to 2023. At a sectoral level, environmental degradation risk is concentrated in sectors such as Electricity and gas, Transport, Chemical, and Oil extraction, mining & quarrying.

To ensure that the measurement of the evolution of these risks is supervised, the portfolio's exposure to climate-related and environmental risk is monitored on a quarterly basis and reported to the Bank's Sustainability Committee.

Biodiversity risk

The World Economic Forum estimates that over half of the world's GDP, 44 trillion dollars, is potentially at risk as a result of companies' reliance on nature and its services. The Living Planet Report 2022 revealed an average decline of 69% in species populations since 1970.

Banco Sabadell's regulatory framework includes different guidelines for the protection of biodiversity. At the top level is the Group's Sustainability Policy. Based on this policy principle, the Bank defined the Environmental and Social Risk Framework, which lays down measures to protect biodiversity.

General exclusions: • Companies that pose a threat to UNESCO World Heritage Sites, Ramsar wetlands, Alliance for Zero Extinction locations, and IUCN Category I-IV areas • Companies in material breach of applicable laws and regulations on human rights and the environment

Sector-specific exclusions: • Farms involved in CITES-regulated products scandals • Farming projects involving burning of natural ecosystems or destruction of High Conservation Value Forests • Vessels operating with large drift nets or using drift nets to capture endangered species • Bottom trawling in deep waters • Mountain Top Removal mining methods • Mines without closure and site recovery plans or with improperly managed tailing dams • Mining projects discharging tailings into river systems • Desalination plants without adequate mitigation measures

The Bank monitors the impact generated by companies' activities within its loan book from two points of view:

1. Quarterly monitoring of environmental degradation risk: sectors with the greatest impact are Electricity, Road transportation, Maritime transportation, Agriculture and fishing, and Oil and gas

2. Classification of borrowers according to the Climate-related and Environmental Risk Indicator (IRCA): Companies with "High" or "Very High" environmental degradation risk are given a worse rating

Environmental and Social Risk Framework

This Framework consolidates the set of applicable criteria (sectoral standards) that are intended to limit the financing of customers or projects contrary to the transition to a sustainable economy or that lack alignment with international regulations or best practices.

The Framework integrates compliance with rules and standards at the level of social risk, including the International Labour Organisation (ILO) Conventions and the UN Guiding Principles on Business and Human Rights.

General exclusions limiting financing of companies with high social risk: a. Companies employing child labour or forced labour, or participating in human rights violations b. Companies involved in resettlement of indigenous or vulnerable groups without their consent c. Companies in material breach of laws and regulations on human rights and the environment d. Companies without health and safety policies such as OHSAS 18001 or ISO 45001

Social risk

Social risk takes into account various social factors related to rights, well-being, and interests of people and communities. A series of actions have been implemented for identifying, measuring and managing social risk for both retail and business customers.

Additional aspects assessed include:

1. Advanced Climate-related and Environmental Risk Indicator (IRCA): has a specific module to capture quantitative social indicators including human rights, quality employment, equality, fair compensation, talent management, occupational safety, and supplier/customer management

2. Risk acceptance process: operations require an ESG Annex assessing potential controversies related to labour disputes, community impact, corruption, bribery, and workplace safety

These quantitative indicators are monitored quarterly and reported to the Bank's Sustainability Committee.

Governance risk

The Institution assesses governance risks of counterparties, considering different governance factors related to management and operation, such as anti-bribery and anti-corruption practices and compliance with relevant laws and regulations.

Additional aspects assessed include:

1. Advanced IRCA: has a specific module for governance indicators
2. Risk acceptance process: includes assessment of governance-related controversies

These are monitored quarterly and reported to the Sustainability Committee.

Once the material topics for the Bank have been identified, the sustainability information that is to be disclosed in the annual Sustainability Report is structured. Based on these material topics and the structure of the European Sustainability Reporting Standards (ESRS), this report covers environmental information first, followed by information on social aspects to finally conclude with information related to governance. Thus, the structure of the Sustainability Report follows the table of contents set out below:

Transition plan for climate change mitigation

Banco Sabadell continues to move ahead with its Decarbonisation Strategy, whilst at the same time moving closer to achieving global climate targets, as a signatory of the Collective Commitment to Climate Action (CCCA) and a member of the Net-Zero Banking Alliance (NZBA), in order to attain emissions neutrality in its investment and lending portfolios by 2050.

Scope of the transition plan

The Bank's commitment to decarbonisation covers all of its activities. It has identified three main pillars, from which cross-cutting and sector-specific levers are activated:

• Strategic action framework: Banco Sabadell believes it is important to ensure that the financed portfolio is aligned with its decarbonisation targets and, to that end, it has introduced elements linked to decarbonisation in its Risk Appetite Framework, in its policies and in its sectoral planning processes, and it has set decarbonisation pathways to achieve those targets. In addition, the Bank has the Environmental and Social Risk Framework described in section 5.1.4.1 ESRS 2 IRO-1: Description of the processes to identify and assess material climate-related impacts, risks and opportunities.

• Support in the transition: in its business activity and to support customers in the transition, the Institution is taking further action to raise awareness and offer advice across all sectors of the business fabric, offering solutions to finance the investments required for this transition. To that end, it is making all of its capabilities available through specialised teams and a Sustainable Financing Framework.

• Risk management: with regard to credit risk management, the Bank has introduced ESG risk management guidelines in the process for authorising credit transactions and in its portfolio monitoring, including ongoing monitoring of decarbonisation pathways.

Customer engagement process

Banco Sabadell follows a process that consists of two stages to achieve customer engagement:

• Know Your Customer (KYC) phase: to understand customers' economic activity, projects, climate/environmental impact and their decarbonisation transition plan.

• Customer support phase: to advise customers through teams specialising in (i) different sector-specific solutions to reduce emissions and (ii) the optimal structure of the transaction in question.

Alignment with Paris Agreement and regulatory requirements

Banco Sabadell aligns its strategy with the Sustainable Development Goals (SDGs) and the Paris Agreement, together with regulatory and supervisory requirements, steering the organisation and helping customers and society in the transition towards a sustainable economy.

In 2020, the Group launched its Sustainable Finance Plan, which incorporates sustainability into the business model, risk management and the relationship with stakeholders, in addition to strengthening its governance with milestones such as the creation of a Sustainability Committee in 2020 and the creation of the Board Strategy and Sustainability Committee in 2021.

To complement this, the document Sabadell's Commitment to Sustainability was published in 2022. This action framework aims to embed ESG considerations sequentially across all of the Group's activities.

Net zero target and interim targets

Target year: 2050 (net-zero emissions)

In December 2024, the Institution published its third set of decarbonisation targets for 2030 as well as a review of the pathways published previously and the main levers to ensure transition.

The established targets are approved by Banco Sabadell's Board of Directors. In addition, regular monitoring reports are sent to governing bodies on the evolution of decarbonisation pathways.

Portfolio decarbonisation targets for 2030

In line with the commitments established by the NZBA, in December 2024, Banco Sabadell continued to move forward with its strategy to fight against climate change, setting decarbonisation targets for the following four new sectors: Residential mortgages, commercial real estate, aluminium, and maritime transport.

The new targets have been added to the first four decarbonisation targets published in December 2022 for the following sectors: Electricity (Power), Oil and Gas, Cement, and Coal Mining, and to those published in December 2023: Aviation, Automotive, and Iron & Steel.

Targets published as at December 2024:

Note: OEM: Original Equipment Manufacturer. Scope 3 emissions are those linked to the use of sold vehicles. vkm: vehicle kilometre. rpk: revenue passenger kilometre. CRREM: Carbon Risk Real Estate Monitor. IAI: International Aluminium Institute. IMO: International Maritime Organisation.

TSB specific targets (UK residential mortgages):

Alignment with 1.5°C and SBTi

The commitments have been set based on the methodology of the Science-Based Targets initiative (SBTi) for all sectors except for electricity, residential mortgages and maritime transport (Alignment Delta).

The activities covered by the aforesaid targets centre on the stage of each sector's production chain where transition is most likely to reduce the overall volume of greenhouse gas emissions. Commitments have been determined taking into account the Net Zero Emissions by 2050 (NZE2050) scenario published by the International Energy Agency (IEA), which establishes decarbonisation pathways for different sectors that are consistent with limiting the global temperature rise to 1.5°C above pre-industrial levels.

Key decarbonisation levers by sector

The Bank applies its decarbonisation strategy ensuring various levers depending on the circumstances of the sector and of the customers themselves:

• Electricity (Power): maintaining a leading position in renewable project finance and promoting the development of new technologies as an alternative to the use of fossil fuels.

• Oil & Gas: taking actions to help customers reduce their emissions, offering finance for investment plans linked, for example, to the development of synthetic fuels or to the transformation of the production model.

• Cement: the main decarbonisation focus area involves helping customers reduce their emission intensity, driving the transformation of their production models.

• Coal: although the Bank's portfolio is residual, it remains firmly committed to phasing out its exposure to companies in this sector, applying restrictions to the approval of new transactions.

• Iron & Steel: focusing on helping customers to improve the energy efficiency of their production process and to drive the circular economy, with increased use of scrap metal as a raw material.

• Automotive: support customers as they transition towards electrification, the development of synthetic fuels for combustion engine vehicles and the optimisation of fuel/energy per kilometre travelled.

• Aviation: supporting customers in the use of Sustainable Aviation Fuels (SAF), improvements in aircraft and engines, fleet upgrades, and operational optimisation.

Own operations decarbonisation

Scope 1 & 2 target (Spain): -14.2% by 2025 vs. 2019 baseline (achieved: -57.5% as at 2024)

Scope 3 target (Spain, excluding category 15): -48.3% by 2025 vs. 2019 baseline (achieved: -41.8% as at 2024)

Total reduction target (Spain): -36.1% by 2025 vs. 2019 baseline (achieved: -47.4% as at 2024)

The Institution is working to establish, from 2025 onwards, new reduction targets for 2030, which will be publicly disclosed in next year's Sustainability Report.

Key levers for own operations

Scope 1 - Direct emissions:

• Fossil fuel gases: Server switch completed (Spain: -68 MWh since 2021); TSB Energy Optimisation Programme (UK: -2,600 MWh)
• Refrigerant gases: HVAC Renewal Plan (Spain: -327 kg vs 2023)
• Company vehicles: TSB electric vehicle fleet at 93% (up from 88% in 2023); Installation of 44 new electric/hybrid vehicle charging points in Spain (total 83, +112.8%)

Scope 2 - Indirect emissions:

Actions relating to energy consumption from the electricity grid.

Scope 3 - Other indirect emissions:

Material categories include business travel and employee commuting.

CapEx and investment commitments

The Institution does not have a CapEx plan for the transition since, as a financial institution, the transition plans focus primarily on providing support for customers' transition through the Bank's products and services.

As part of Sabadell's Commitment to Sustainability, the Bank undertook to mobilise a cumulative total of 65 billion euros of financial products and services in sustainable finance solutions during the 2021-2025 period.

Locked-in emissions and stranded assets

In reference to the blocked GHG emissions originated from the company's key assets and products, it is worth noting that, given the activity carried out by the Institution, these emissions are not material for the Bank's operations and they therefore do not have a significant impact on its environmental sustainability or on its financial statements.

Paris-aligned Benchmarks exclusions

Based on the activity criteria that establish the exclusions applicable to the EU Paris-aligned benchmarks set out in Commission Delegated Regulation (EU) 2020/1818, it has been determined that the Bank is not excluded from those benchmarks on the grounds of the activity that it performs.

Use of carbon credits and removals

Refer to section 5.1.5.4. E1-7: GHG removals and GHG mitigation projects financed through carbon credits for details.

Policies related to climate change mitigation and adaptation

Banco Sabadell Group has implemented several policies to address climate change mitigation and adaptation:

Sustainability Policy

Scope: Applies to Banco Sabadell Group and its entities (including TSB and Banco Sabadell Mexico, which have incorporated ESG parameters into their own policies and internal procedures)

Key content and principles:

• Climate change mitigation and adaptation, aligned with the Institution's business strategy and risk appetite, as well as its policies, processes and controls
• Energy efficiency and reduction of GHG emissions through implementation of energy efficiency measures
• Fostering financing and rollout of renewable energy
• Compliance with legal and other requirements applicable to activities, products and services in various geographies
• Embedding climate risks into the Group's risk management and strategy
• Moving towards the net-zero by 2050 target, establishing achievable and measurable interim goals
• Integrating environmental, social and governance criteria into management and decision-making within the Group's strategy
• Promoting innovation, development, supply and incentives for financial services and products designed to finance projects that reduce GHG emissions (renewable energies, energy efficiency, sustainable mobility)
• Continuously improving the performance of the environmental management system
• Driving implementation of energy efficiency measures and use of renewable energy in the Group's facilities
• Fostering use of sustainable transport options by employees
• Promoting sustainable management of resources needed for the Group's day-to-day activity
• Establishing work guidelines and control mechanisms to ensure environmental protection and pollution prevention in facilities
• Sharing principles with employees and Group companies, fostering internal and ongoing training of workforce in relation to sustainability and energy efficiency
• Setting up fluid communication channels with various stakeholders on environmental matters

Links to international standards: The Policy aligns with:

• Paris Agreement
• Sustainable Development Goals (SDGs)
• Net-Zero Banking Alliance (NZBA) commitments
• Collective Commitment to Climate Action (CCCA)

Environmental and Social Risk Framework

Scope: Applies across the Group's lending and financing activities, with specific sectoral standards and general application criteria

Key content and principles:

• Consolidates applicable criteria (sectoral standards) to limit financing of customers or projects contrary to transition to sustainable economy or lacking alignment with international regulations or best practices
• Includes climate-related and environmental risk assessment
• Contains general exclusions and sector-specific restrictions
• Limits financing to companies with high level of environmental degradation risk (including biodiversity risk)
• For energy sector: prohibits financing new coal-fired power plants and financing for new thermal coal mining (with specific exceptions for countries heavily dependent on coal with no viable alternatives)

Governance: The Framework is described in section 5.1.4.1 ESRS 2 IRO-1 and integrated into the Institution's decision-making processes

Links to international standards:

• International Labour Organisation (ILO) Conventions
• UN Guiding Principles on Business and Human Rights

Environmental Risk Policy

Key content and principles:

• Framework for appropriately managing and controlling environmental risks to which the Institution is exposed
• Rolling out measures aimed at mitigation and adaptation of climate change and environmental degradation

Environmental management system

Key content and principles:

• Supports the implementation of energy efficiency measures
• Drives use of renewable energy in Group facilities
• Promotes sustainable resource management

Monitoring and implementation: The policies incorporate environmental factors in decision-making and respond to needs and concerns of all stakeholders. The Institution has:

• Established decarbonisation targets approved by the Board of Directors
• Regular monitoring reports sent to governing bodies on evolution of decarbonisation pathways
• Integrated ESG considerations into Risk Appetite Framework, policies and sectoral planning processes
• Created governance structures including Sustainability Committee (2020) and Board Strategy and Sustainability Committee (2021)

Public availability: References made to:

• Sabadell's Commitment to Sustainability (published 2022)
• Sustainable Finance Plan (launched 2020, regularly approved, reviewed and updated by Sustainability Committee)

The policies are intended to mitigate potential impacts and risks, support business opportunities, and enhance reputation and good practice by incorporating ESG parameters in all of the Institution's activities and organisation.

Actions and resources in relation to climate change policies

Strategic Framework

As a financial institution, Banco Sabadell Group plays a fundamental role in building an inclusive and decarbonised economy. The Bank's ESG framework, Sabadell's Commitment to Sustainability (launched in 2022), establishes transformation and promotion actions with the following key levers:

• Progress as a sustainable Institution: Focusing on greenhouse gas (GHG) emissions neutrality
• Support customers in the transition to a sustainable economy: Laying down decarbonisation pathways, supporting customers with specialised solutions for renewable energy, energy efficiency and sustainable mobility, and defining sectoral standards
• Offer investment opportunities that contribute to sustainability: Wide range of sustainability funds, green bonds and sustainability bonds

Actions to reduce own operations emissions (Scopes 1, 2, 3)

Scope 1 - Direct emissions

Fossil fuel gases reduction

The Energy Optimisation Programme consists of:

• Exploring phase-out of fossil fuels
• Reducing waste generated by activity
• Testing new water saving technology
• Eliminating paper usage in processes
• Eliminating non-FSC/PEFC paper products

Refrigerant gases: Monitoring and management of F-gas leaks from HVAC systems in corporate buildings and branches

Actions to support customers in the transition

1. Renewable Energy Project Finance

Scope: Downstream value chain (Corporate & Investment Banking)

Resources allocated:

• 2024: 39 projects, €1,228 million in financing (up 11% vs 2023)
• Banking ranking: 2nd by number of transactions, 3rd by volume in Spain/Portugal (source: Infralogics)

Geographic breakdown 2024:

Technology breakdown 2024:

Installed capacity impact: 7,644 MW of renewable capacity installed in 2024 (6,735 MW solar)

Expected outcomes: Emissions prevented: 2.15 million tCO2e from financing renewable energy projects

Time horizon: Ongoing (annual pipeline); 54.9 GW of licensed projects expected until 2027

2. Green and social loans (Business Banking)

Scope: Downstream value chain (Corporate/SME customers)

Resources allocated: Over €4.1 billion mobilised in 2024 through sustainable financing aligned with the Bank's Sustainable Financing Framework

Instruments: Medium- and long-term financing, secured/unsecured loans, leases, rentals, guarantee facilities

Partnerships for turnkey solutions:

• Photovoltaic self-consumption: Agreements with Iberdrola and EDP Solar (comprehensive service including installation, maintenance and upgrade)
• Building retrofits: Agreement with Agentia R+ as renovation agent (includes management of public subsidies)

3. Sustainability-Linked Loans

Scope: Downstream value chain (Corporates and SMEs)

Resources allocated: Over €3 billion mobilised as at end-2024

Focus: Primarily focused on reduction of customers' CO2 emissions

Mechanism: Transaction price linked to evolution of sustainability KPIs

4. Sabadell Renting's mobility solutions

Scope: Downstream value chain (Retail and business customers)

2024 results:

• ECO vehicles (hybrid/electric with 'ECO' or 'zero emissions' label): 67% of all vehicles on offer
• New contracts for ECO vehicles: 43% of total

Actions:

• Direct campaigns promoting ECO vehicles
• Sharp focus on electric vehicles
• Specific campaigns for all Banco Sabadell staff
• Increased sale of second-hand vehicles up to 4 years old

5. Social loans to SMEs and micro-entities

Scope: Downstream value chain

Resources allocated:

• 2024: Over €2.8 billion in finance (loans and credit)
• Cumulative 2021-2024: Over €11.5 billion (77% of €15bn target for 2021-2025 period)
• 2024: 46% of financing to self-employed professionals granted to women

Impact measurement:

• 68% of SMEs/micro-entities financed in 2022 maintained or increased employees (2023 data)
• 73% improved sales volumes

Link to policy: Supports employment maintenance and business fabric development

6. Support for businesses - Next Generation Funds

Scope: Downstream value chain

Actions:

• Webinars through Business Hub on sustainability and Next Generation Funds
• Agreements with Iberdrola and EDP Solar for turnkey solutions
• Home renovations: Facilitating access to Next Generation EU grants for energy efficiency

PERTE participation:

• Shipbuilding PERTE: Agreement with PYMAR (July 2023); €13+ million in guarantees for 45 projects (2024)

7. Sustainable financing solutions for Retail Banking

Scope: Downstream value chain (Individual customers)

Green mortgages: Focus on properties with highest energy efficiency ratings

Green assets financed: Electric vehicles, solar panels, aerothermal products, batteries, vehicle charging points

Sabadell Consumer Finance: Partnership referral agreements with companies providing sustainable solutions (photovoltaic installations, aerothermal products, batteries, EV charging points)

Pricing mechanism: Positive price adjustment for transactions to acquire 'green assets' (incentive for customers and account managers)

Carbon offsetting and removals

Scope: Own operations (Spain, Mexico, USA, UK)

2024 resources allocated: €21 per metric tonne CO2e average cost

Carbon credits cancelled:

Projects:

• Spain: Valle de Sedano reforestation (Burgos) - 169.42 hectares, native species
• Mexico: Durango forest management project - improved CO2 removal (7,078.24 tCO2e offset)
• UK (TSB): ArBolivia reforestation project (Plan Vivo) - 1,124.62 tCO2e offset, 52,000+ trees planted

Certifications: Ministry for Ecological Transition (Spain), Climate Action Reserve (Mexico), endorsed by ICROA

Internal carbon pricing

Mechanism 1 - Discounts for sustainable transactions:

• Green and Social Loans (GSLs): Discount applied to financing for EU taxonomy-aligned projects contributing to taxonomy objectives (funds traceable, impact measured)
• Sustainability-Linked Loans (SLLs): Transaction price linked to KPI evolution; annual customer measurement and evidence submission required for discount

Mechanism 2 - Transition risk assessment: Quantitative methodology aligned with NGFS scenarios (Orderly Transition, Disorderly Transition, Hot House World) integrated into credit risk pricing

Governance and monitoring

• Financed portfolio carbon footprint: Quarterly monitoring since September 2022, reported to Sustainability Committee and Technical Risk Committee
• 2024 financed emissions: 15.31 million tCO2e (78.05 tCO2e/€m intensity; average DQ 3.28)
• Annual audit: Independent third-party verification of financed portfolio carbon footprint calculation

Equator Principles application

Scope: Project finance ≥$10m, corporate loans related to projects ≥$50m

2024 results: 31 new structured finance projects signed

• 74.2% renewable energy projects
• Social and environmental assessment by independent expert

Breakdown:

Target linkage

Cumulative mobilisation target: €65 billion in sustainable finance solutions (2021-2025)

Decarbonisation targets: Third set published December 2024, aligned with Net-Zero Banking Alliance (NZBA) commitment to net-zero by 2050

Targets related to climate change mitigation and adaptation

Emission reduction targets of the loan book

In line with the commitments established by the NZBA, in December 2024, Banco Sabadell continued to move forward with its strategy to fight against climate change, setting decarbonisation targets for the following four new sectors: Residential mortgages, commercial real estate, aluminium, and maritime transport.

The new targets have been added to the first four decarbonisation targets published in December 2022 for the following sectors: Electricity (Power), Oil and Gas, Cement, and Coal Mining, and to those published in December 2023: Aviation, Automotive, and Iron & Steel, thereby covering all of the most carbon-intensive sectors of its loan book for which a target-setting methodology exists.

Targets have been set based on the methodology of the Science-Based Targets initiative (SBTi) for all sectors except for electricity, residential mortgages and maritime transport (Alignment Delta).

Targets published as at December 2024

Notes:

• OEM: Original Equipment Manufacturer. Scope 3 emissions are those linked to the use of sold vehicles (category 11 - Use of sold products).
• vkm: vehicle kilometre
• rpk: revenue passenger kilometre
• CRREM: Carbon Risk Real Estate Monitor for Spain and Portugal
• IAI: International Aluminium Institute
• IMO: International Maritime Organisation
• tnm: tonne-nautical mile

TSB specific targets (UK subsidiary)

In August 2023, TSB published specific targets for its residential mortgage book:

Monitoring of decarbonisation targets (progress to date)

Pathway evolution calculated based on customer exposure as at year-end and on counterparties' most recent data available in the first quarter of 2024:

Note: Decarbonisation targets for 2030 do not assume a linear reduction in the intervening years, meaning that fluctuations in value may occur during these years but should not be interpreted as a failure to meet the target.

Overall commitment

The Institution remains committed to attaining greenhouse gas emissions neutrality in its balance sheet by 2050, as a signatory of the Collective Commitment to Climate Action (CCCA) and a member of the Net-Zero Banking Alliance (NZBA).

Farming sector

In the farming sector, the lack of robust methodologies and comparable data means that quantitative targets cannot be established. However, the Institution continues to assess its farming portfolio, focusing on customer engagement, and it will set decarbonisation targets once uniform data and suitable methodologies are available.

Energy consumption and mix

Banco Sabadell Group (all geographies)

Spain

Scope note (Spain): In Spain, 98.79% of electricity is purchased from resellers with renewable origin certification (REGO). 1.50% is self-generated through solar panels (638 MWh in 2024, up from 615 MWh in 2023). The capacity of solar panels was increased during 2024 to triple current electricity production. Fossil fuel consumption includes natural gas (used in three corporate buildings for HVAC and dehumidification) and diesel (mainly for mobile branches and backup generators; diesel consumption decreased 55% vs 2021 due to data centre switch but increased 2% vs 2023 due to mobile branches deployed after DANA floods).

TSB (United Kingdom)

Scope note (TSB): TSB completed the third phase of its Energy Optimisation Programme in 2024, resulting in a 2,600 MWh reduction in location-based consumption of fossil fuel gases and electricity compared to 2023. Natural gas is mainly used in winter across the branch network and corporate buildings. All purchased electricity has renewable origin certification.

Mexico

Scope note (Mexico): Facilities in Mexico only use electric power with Renewable Energy Guarantee of Origin (REGO). No fossil fuel consumption.

USA

Scope note (USA): The two corporate buildings in Miami (Miami Lakes Operating Center and Sabadell Financial Center) use only electric power with Renewable Energy Guarantee of Origin (REGO) for all purposes including heating and cooling.

Methodology

The scope covers the entire Banco Sabadell Group as it does in the financial statements. All geographies (Spain, UK, Mexico, USA) report 100% renewable electricity procurement with certification (REGO). Spain additionally self-generates 1.50% of its electricity consumption through solar panels. Fossil fuel consumption is primarily natural gas (Spain, UK) and diesel (Spain). No consumption from nuclear sources is reported. Total energy consumption across the Group decreased 11% from 73,197 MWh (2023) to 65,141 MWh (2024).

Energy intensity: Not disclosed.

Gross Scopes 1, 2, 3 and Total GHG emissions

E1-6: Gross Scopes 1, 2, 3 and Total GHG emissions

The CO2 emissions released by the Group in the geographies in which it is present (Spain, United Kingdom, Mexico and USA) amounted to 13,082.48 tonnes (market-based), recording a change of +23.2% compared to 2023. The reason for that increase was the expanded perimeter in TSB (UK) in 2024, which included the calculation of travel whilst commuting and teleworking, which amounted to 3,197 tCO2e. The change in the footprint for 2024 compared to 2023, on a like-for-like basis, is a reduction of -33.2%.

Banco Sabadell Group (all geographies)

Scope note: Does not include the footprint generated by real estate assets that have been leased out, estimated at 331 tonnes of CO2e, which would correspond to 2.5% of the Group's total carbon footprint. The base year corresponding to Spain's tCO2e is 2019, while for the UK it is 2023. The base year is not included for Mexico or the USA, as these geographies have not yet set any carbon footprint reduction targets. The target year corresponding to Spain's tCO2e is 2025, while for the UK it is 2030. Scope 3 excludes category 15 (Investments/Financed emissions) – those are reported separately.

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Spain

Scope note (Spain): Employee commuting calculated for the corporate buildings with the largest number of employees in Spain. Total emissions calculated in this category for Spain corresponding to 2024 came to 1,869.48 tonnes of CO2e.

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United Kingdom (TSB)

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Mexico

Scope note (Mexico): Mexico has not established carbon footprint reduction targets, so no data is included in relation to the base year, target year or annualised % of target.

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USA

Scope note (USA): The USA has not established carbon footprint reduction targets, so no data is included in relation to the base year, target year or annualised % of target.

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Emission factors and methodology

The emission factors applied were updated during 2024 by various official institutions and/or internationally recognised organisations. In the case of Spain, the emission factors correspond to Oficina Catalana pel Canvi Climàtic (2024 edition), with the exception of those associated with cars, for which DEFRA 2024 factors were used. In the case of the United Kingdom and Mexico, emission factors correspond to DEFRA 2024. In the case of the USA, emission factors correspond to those published by the US Environmental Protection Agency and by DEFRA.

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Emissions of the financed portfolio (Scope 3 Category 15)

Emissions of the financed portfolio account for the largest share of the Group's emissions. Since 2021, Banco Sabadell Group has calculated the carbon footprint of its financed portfolio using the Partnership for Carbon Accounting Financials (PCAF) methodology.

The absolute emissions of the Group's financed portfolio in terms of scope 1 and 2 as at the end of 2024 came to 15.31 million tCO2e, which, considering the emission intensity value calculated using the standard measurement in the sector, which is per million euros financed, represents an emission intensity of 78.05 tCO2e/€m with an average Data Quality (DQ) of 3.28. To complement this, if one were to calculate an intensity of emissions financed based on net income, this would be 2,416 tCO2e/€m.

The segment that contributes the most to the footprint is the business portfolio (approximately 57%), which represents 33% of the credit exposure in the portfolio, followed by sovereign bonds. The sectors that contribute the most to the financed portfolio's footprint are Agriculture, forestry and fishing, Construction materials, the Steel industry and Maritime transportation.

Financed emissions by PCAF segment

Scope note: The data for coverage of emissions in TSB corresponds to 2023 year-end. The Bank is focusing its efforts on project finance for renewable energies. These efforts are also reflected in the 2.15 million tCO2e of emissions prevented as a result of financing these types of projects. Calculation is based on approximately 97% of the financed portfolio.

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E1-7: GHG removals and GHG mitigation projects financed through carbon credits

In 2024, Banco Sabadell renewed its commitment to offset its carbon footprint, including all scope 1, 2 and 3 emissions in Spain, Mexico and the USA, through the purchase of credits in various reforestation projects. TSB offset its scope 1 and 2 emissions generated in 2024, which amounted to 1,124.62 tCO2e.

Carbon credits cancelled in the reporting year

Scope note: Total CO2 emissions to be offset come to 7,078.24 tCO2 equivalent. The carbon credits acquired for offsetting correspond, in the case of Spain, to projects registered with the Ministry for Ecological Transition and the Demographic Challenge and, in the case of projects in Mexico, to those registered with the Climate Action Reserve, endorsed by the International Carbon Reduction and Offset Alliance (ICROA). TSB offsets via Forest Carbon's ArBolivia reforestation/afforestation project (Plan Vivo).

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E1-8: Internal carbon pricing scheme

The Institution has established carbon pricing for emissions from its own operations, which materialises through the offsetting of emissions, maintaining the commitment to offset the carbon footprint including all scope 1, 2 and 3 emissions in Spain, Mexico and the USA and scope 1 and 2 emissions in TSB. The average cost of this offset was c.€21 per metric tonne of CO2e in 2024.

In addition, with regard to the financed portfolio, the Bank has several pricing mechanisms:

• Discounts for GSLs and SLLs: discounts are applied to the final price of finance for eligible transactions/projects/investments that are aligned with the EU taxonomy and substantially contribute to any of the six taxonomy objectives.

• Integration of transition risk into credit risk: the Group has internally developed a methodology for the quantitative assessment of transition risks that is aligned with the three scenarios (Orderly Transition, Disorderly Transition and Hot House World) of the Network for Greening the Financial System (NGFS). A direct cost is assigned or considered for greenhouse gas emissions. The Climate-related and Environmental Risk Indicator (CERI, or IRCA by its Spanish acronym) incorporates transition risk drivers and can impact the rating and probability of default of counterparties.

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

Phase-in exemption

Banco Sabadell uses the phase-in exemption for ESRS E1-9. According to the disclosure requirements table:

• Exposure of the benchmark portfolio to climate-related physical risks, paragraph 66: Information not required for 2024
• Disaggregation of monetary amounts by acute and chronic physical risk, paragraph 66 (a): Information not required for 2024
• Location of significant assets at material physical risk, paragraph 66 (c): Information not required for 2024
• Breakdown of the carrying value of its real estate assets by energy-efficiency classes, paragraph 67 (c): Information not required for 2024
• Degree of exposure of the portfolio to climate-related opportunities, paragraph 69: Information not required for 2024

Transition risk analysis

Business lending portfolio

The Bank has minimal exposure (around 0.01%) to the segment with the highest transition risk ("High").

Breakdown of transition risk exposure in business lending portfolio (%):

In 2024, transition risk remained broadly stable, with a 1% reduction in "Moderate" risk and a 1% increase in the "Low" and "No Risk" categories.

The five industries that account for the majority of the transition risk in the business portfolio have limited weight. Sectors with higher transition risk (aviation, shipping, mining, automotive, and oil extraction, mining & quarrying) play a secondary role in terms of exposure within the Institution's portfolio.

Key sectors:

• Oil extraction, mining & quarrying: 1% of the Bank's credit book
• Construction: 7% of the Bank's credit book

TSB portfolio

TSB's credit book is almost entirely made up of mortgages. Almost all of TSB's transition risks come from the energy performance of the properties used to secure mortgage loans and from the cost of improving their energy efficiency rating in the short, medium and long term.

Methodology

Transition risk measurement

The transition risk analysis measures the inherent risk of the portfolio and not the residual risk, as controls that each counterparty currently has in place to mitigate it are not considered.

The total impact considers the impact broken down by:

• Income
• Costs
• Low-carbon capex

Impacts are classified as:

• "Positive" for activities in which the transition could have a positive effect
• "No Risk"
• "Low"
• "Moderately Low"
• "Moderate"
• "Moderately High"
• "High" (includes activities most affected by transition risk such as coking plants)

Bottom-up analysis for large borrowers

The Bank conducts advanced Climate-related and Environmental Risk Indicator (IRCA) assessments for large corporates. This transition risk assessment is conducted using:

• Publicly available information about the customer
• Internal transition risk model
• Expertise of the Bank's ESG analysts

Collateral and mortgage portfolio analysis

Transition risk for real estate properties financed by the Bank is evaluated based on properties' energy efficiency, measured using Energy Performance Certificates (EPCs).

The Bank has four mechanisms to obtain EPC data for properties in Spain:

1. Obtain data based on the Energy Performance Certificate (EPC)
2. Look up the property on public databases of EPCs of Autonomous Communities
3. Obtain data based on similarity to other properties with EPC ratings in the same building
4. Estimate using a supplier model based on more than four million EPC ratings

Outside of Spain:

• In the United Kingdom: estimated EPC ratings based on average ratings of postcodes or regression model outputs
• In Mexico: estimation model for EPC ratings and energy consumption (kWh/m²) provided by external supplier

Policies related to own workforce

Banco Sabadell has a set of policies, codes and standards that govern and guide the actions of its own workforce across the entire organisation. This regulatory framework is reviewed on a regular basis and ensures compliance with European directives and regulations, as well as with all standards in force at the local level.

Banco Sabadell's policies are approved by the Institution's Board of Directors of Banco Sabadell, as the top approval authority, responsible for establishing principles, commitments and objectives. The policies listed below are those related to the Institution's own workforce and they are published on the Bank's corporate website or on its corporate intranet available to the entire workforce.

Banco Sabadell Group Human Rights Policy

Key content and principles: Through this Policy, Banco Sabadell Group defines a series of principles with the objective of supporting and respecting the protection of internationally recognised human rights within its sphere of influence. In terms of its employees, the Group fosters and strives to keep an environment where everyone in the workforce is treated with dignity and respect, fairly, and without discrimination of any kind on grounds of gender, ethnicity, age, social background, religion, nationality, sexual orientation, political opinion or functional diversity; promoting equal employment and promotion opportunities, work-life balance, and the inclusion of people with functional diversity, whilst ensuring the fundamental right of employees to form or join unions or other representative bodies, safeguarding freedom of opinion, as well as employees' basic right to engage in collective bargaining, and prohibiting any form of forced or child labour.

Links to international standards: This commitment is underpinned by, among other things, the Guiding Principles on Business and Human Rights, the Universal Declaration of Human Rights, the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work, and the United Nations Principles for Responsible Investment.

Scope: Applicable to all Group companies.

Approval: Approved in 2021, reviewed annually.

Banco Sabadell Group Code of Conduct

Key content and principles: This document aims to define the criteria that should be followed for ethical and responsible behaviour, both in relationships within the Group itself and in those entered into with customers, suppliers, shareholders, investors and other stakeholders. The Group adopts the following principles to build its corporate culture and as a framework of reference: Will to serve, Proximity, Adaptability, Commercial approach, Innovation, Professionalism, Ethical behaviour, Sustainability, Austerity, Prudence, Teamwork, Compliance, Transparency, and Respect for privacy.

The entire organisation's commitment to effective equality between women and men is reflected in the Code. This Code promotes equal opportunities in access to work and career advancement, ensuring that there is no discrimination on account of the race, sex, ideology, nationality, religion, sexual orientation or any other personal, physical, psychological or social condition of its workers.

The Code of Conduct is intended to motivate, retain and attract a team of competent and professional people, offering appropriate overall compensation through its human resources management policies, the pillars of which are fair and competitive remuneration, respect for people's dignity, and guiding decision-making towards reducing the gender pay gap, all within the existing regulatory framework.

Approval and governance: First approved in 2021 by the Board of Directors, underwent an in-depth review to adapt it to regulatory requirements, supervisory guidelines and specifications, and to market standards. Every member of the Group's workforce was required to read and expressly accept the new version.

Public availability: Published on the Bank's corporate website and on its corporate intranet.

Banco Sabadell Group Sustainability Policy

Key content and principles: The goal of this Policy is to frame the Group's activity and organisation within ESG parameters, which incorporate environmental, social and governance factors in decision-making. A series of principles are established: the contribution to sustainable development, prudence, transparency, security, diversity, commitment to society, environmental protection, respect for fundamental human rights, and professional development.

Scope: Applicable to all Group companies.

Public availability: Published on the Bank's corporate website.

Banco Sabadell Director Selection Policy

Key content and principles: The objective of this Policy is to establish the principles and criteria that Banco Sabadell should take into account in its selection processes and also, therefore, in the initial fit and proper assessment and ongoing assessments of the members of the Board of Directors, as well as in the re-election of members of the management body. Furthermore, it lays down the principles and targets in relation to diversity in the selection, induction and training of directors.

The process for selecting candidates for Directors and re-electing existing Directors is governed by the principle of diversity, among others, thereby fostering diversity on the Board. The main principles include: identifying the needs of the Bank, ensuring candidates meet requirements of repute, suitability and good governance, considering objectives, parameters and procedures for selection, and ensuring Directors' mandates are renewed in an orderly and well-planned manner.

Scope: Applicable to Board of Directors selection processes.

Banco Sabadell Group Remuneration Policy

Key content and principles: The main aim of the Remuneration Policy is to define the principles of Banco Sabadell Group's remuneration framework with the utmost transparency and clarity. The Policy is based on the following principles:

1. Promote business and social sustainability in the medium-long term and ensure alignment with Banco Sabadell Group's values, including aligning remuneration with shareholders' interests and long-term value creation, implementing rigorous risk management, and aligning with the Group's long-term business strategy, objectives, values and interests.

2. Ensure a competitive and fair remuneration system (external competitiveness and internal fairness) that is able to attract and retain the best talent, rewards professional experience and responsibility irrespective of gender, is based on equal pay for male and female employees for equal work or for work of equal value, and is aligned with market standards and flexible.

3. Reward performance, thereby aligning remuneration with individual results and the level of risk taken, finding an adequate balance between the various remuneration components, considering current and future risks and results, and implementing a simple, transparent and clear-cut remuneration scheme.

Integration of sustainability: The remuneration policy and practices integrate sustainability risks. Remuneration components must contribute to the promotion of environmental, social and governance actions in order to make the business strategy sustainable and socially responsible. Variable remuneration will be linked to results.

Scope: Applicable to all Banco Sabadell Group companies, although different remuneration components will apply depending on the region, activity sector, professional category and/or function performed by each employee.

Public availability: The Banco Sabadell Group Remuneration Policy, in its entirety, includes information about the integration of sustainability risks published on the Group's website.

Additional policies referenced

The document also references:

• Equality Plan: Renewed in 2022 with the agreement of 100% of workers' legal representatives. Contains work-life balance measures and provisions on non-discrimination.
• Corporate Crime Prevention Policy: Overseen by the Corporate Ethics Committee.
• General Policy on Conflicts of Interest: Overseen by the Corporate Ethics Committee.
• Anti-Corruption Policy: Overseen by the Corporate Ethics Committee.
• Policy on the Internal Reporting System and Protection of Reporting Persons: Overseen by the Corporate Ethics Committee.

Monitoring implementation: The People division has internal processes for identifying and managing the impact of salary reviews in order to deliver on the corporate commitment of reducing the Institution's gender pay gap. Continuous monitoring, along with frequent reports sent to the Institution's decision-making bodies and annual reports sent to governing bodies for information and evaluation, is an essential prerequisite to achieve the established targets. Pay gap is monitored during salary reviews, analysing the impact of any salary reviews on that gap. The analysis and its conclusions are discussed at the People division's top-level committee and escalated to the corresponding governing bodies on an annual basis.

Taking action on material impacts on own workforce

Banco Sabadell Group has implemented several initiatives and measures linked to material impacts on its own workforce. All initiatives are linked to material impacts, as no material risks or opportunities were identified in connection with its own workforce.

Talent: management, attraction, retention and leadership programmes

Scope: Own operations
Approach: The Group provides an ideal place for professional career development through a solid talent management model, internal recruitment, promotions and training, and external talent attraction.

Key components:

• Sabadell Talent Appraisal: A process aimed at all employees to identify talent and potential, provide individual feedback, and make career progression decisions. Structured around three components:

  • Mindset (acting with the Bank in mind, applying expertise, thinking outside the box)
  • Delivery (focusing on tasks, working quickly and efficiently, quality and regulatory compliance)
  • Engagement (positive attitude, good work environment, teamwork)
  • Counts as 20% of individual targets for employees receiving variable remuneration

• Talent recruitment model: Prioritizes internal recruitment over external recruitment, equal opportunities, and process quality. Promotes people with potential and offers opportunities for internal growth.

Work-life balance measures

Scope: Own operations
Link to policy: Measures set out in the Equality Plan
Details: Referenced in section 5.2.3.4 and detailed metrics provided in S1-15

Pay gap reduction initiatives

Scope: Own operations (Spain, UK/TSB, Mexico)
Approach: Internal processes for identifying and managing the impact of salary reviews to reduce the gender pay gap
Governance: Continuous monitoring with frequent reports to decision-making bodies and annual reports to governing bodies
Link to policy: Group's Remuneration Policy and principles of remuneration models
Outcomes tracked:

• 2024 gross pay gap (average): Spain 20.61%, UK 29.98%, Mexico 20.51%, Total 23.02%
• 2024 gross pay gap (median): Spain 13.89%, UK 26.74%, Mexico 11.74%, Total 17.13%
• Improvement from 2023: Total average gap reduced from 23.69% to 23.02%

Training programmes

Scope: Own operations
Approach: Policies implemented in relation to training
Metrics: Total hours of training broken down by professional category (detailed in S1-13)
Link to policy: Referenced under Integration of sustainability-related performance in incentive schemes (GOV-3)

Health and safety programmes

Scope: Own operations
Approach: Health and safety conditions in the workplace maintained
Outcomes tracked:

• Number of work-related accidents and work-related ill health by gender
• Frequency and severity rates by gender
• Hours of employee absence
• Details provided in S1-14

Employee engagement and communication

Scope: Own operations
Approach: Listening to employees through surveys
Time horizon: Ongoing (weekly surveys sent in Q2 2024)
Method: Weekly surveys sent to small random sample of employees to ascertain work experience
Outcome: Internal transparency continued to be rated highly

Right to disconnect policies

Scope: Own operations
Link to policy: Policies safeguarding employees' right to disconnect implemented

Workplace organization measures

Scope: Own operations
Approach:

• Organization of working hours
• Measures to facilitate work-life balance
• Equal enjoyment of work-life balance measures by both parents

Social dialogue and collective bargaining

Scope: Own operations
Approach:

• Organization of social dialogue with procedures for informing, consulting and negotiating with staff
• Collective bargaining agreements covering health and safety
• Mechanisms to promote employee involvement in company management
• Coverage: Percentage of employees by country detailed in S1-8

Equality and non-discrimination

Scope: Own operations
Approach:

• Equality Plans per Chapter III of Organic Law 3/2007
• Measures to promote employment
• Protocols against sexual and sex-based harassment
• Policy against all forms of discrimination
• Gender diversity management Link to policy: Referenced in S1-1 (Policies) and S1-3 (Remediation processes)

Accessibility and inclusion

Scope: Own operations
Approach: Integration and universal accessibility for people with disabilities
Metrics: Number of employees with disabilities tracked (S1-6)

Data protection and cybersecurity training

Scope: Own operations
Time horizon: Annual (ongoing in 2024)
Approach: Mandatory annual training courses in data protection and cybersecurity for all employees, plus specific training programmes for cybersecurity teams

Human rights due diligence

Scope: Own operations and value chain
Approach: Due diligence procedures, prevention of human rights violations, measures to mitigate, manage and redress violations
Link to policy: S1-1 and S4-1 policies

Targets related to own workforce

Banco Sabadell has established targets for 2025 (baseline year 2021) for the Spain perimeter focused on diversity, gender equality, and talent development:

Additional Context

• Targets are aligned with the Equality Plan and ESG strategy set out in the Institution's Commitment to Sustainability
• The People division leads the Diversity, Fairness and Inclusion (DFI) strategy
• Topics are escalated to governing bodies on a recurring basis for monitoring
• Female representation targets are embedded in the sustainability indicator forming part of corporate objectives
• Progress is monitored through committees including MPEC, DEAC, and Equality Plan Monitoring and Assessment Committee

Characteristics of the undertaking's employees

Total headcount by gender

Group data as at 31/12/2024.

Headcount by professional category and gender

Group data as at 31/12/2024. 'Senior management' includes executive directors, senior management, general management, corporate directors and top management. 'Middle management' includes directors not included in the 'Senior management' category. In Spain, roles classified as technical roles are included in the 'Specialist staff' category, in accordance with the Collective Bargaining Agreement for Banks.

Headcount by age range and gender

Group data as at 31/12/2024.

Headcount by country and gender

Group data as at 31/12/2024. Workforce in the United Kingdom includes employees at TSB and at Banco Sabadell's London branch. Other geographies includes countries in which the foreign branches and representative offices are located, the United States being the country with the largest representation.

Headcount by nationality

Group data as at 31/12/2024.

Headcount by contract type and gender

Group data as at 31/12/2024. Practically all Group employment contracts (99%) are permanent contracts.

Headcount by contract type and professional category

Group data as at 31/12/2024.

Headcount by contract type and age range

Group data as at 31/12/2024.

Headcount by contract type and region

Group data as at 31/12/2024.

New hires by gender, age range and professional category

By gender and age range:

Group data as at 31/12/2024.

By professional category and age range:

Group data as at 31/12/2024.

Employee leavers by gender, age range and professional category

By gender and age range:

Group data as at 31/12/2024.

By professional category and age range:

Group data as at 31/12/2024.

Turnover rates

Voluntary turnover rate (Group ex-TSB):

Voluntary turnover rate = ((annual voluntary leavers) / (average workforce)) * 100. 'International' includes Mexico, foreign branches and representative offices.

Involuntary turnover rate (Group ex-TSB):

Involuntary turnover rate = ((annual involuntary departures) / (average workforce)) * 100. Includes those leaving due to dismissal and other involuntary reasons. Does not include those leaving due to restructuring processes.

Employees with functional diversity

As at 31 December 2024, Banco Sabadell Group's workforce consisted of 18,769 people. The average age is 45 years, with an average length of service of 17 years. The workforce is diverse in terms of both geographical distribution (30% are in international locations) and gender (54.6% are women).

The Group's workforce has shrunk by 2.8% over the past year, going from 19,316 employees to the current 18,769 employees.

As at the end of 2024, Banco Sabadell has 204 contract staff in Spain with a temporary employment contract, hired through Temporary Employment Agencies.

Collective bargaining coverage and social dialogue

Coverage by collective bargaining agreements

In Spain, 100% of workers are covered by the Collective Bargaining Agreement, while in all other countries, the prevailing legislation in each country is applied. In addition, in Spain 100% of staff are represented by workers' representatives.

In the United Kingdom, TSB continues to maintain a fluid and direct relationship with trade unions, renewing its agreement with Accord and Unite in 2023, which establishes the collective bargaining agreements. The agreement was reached with 90% of the workforce represented. This relationship has allowed the management team to work in an open and collaborative manner to consult with trade union representatives on all issues affecting TSB's relationship with its staff, and to assess possible initiatives to make improvements to the workforce and introduce organisational changes.

In the subsidiary in Mexico, there is no relationship between people and union representatives.

Coverage rates by region

Note: European Economic Area (EEA). Excludes Mexico as it represents less than 10% of total employees.

Social dialogue arrangements

Banco Sabadell Group guarantees the basic rights of all its employees in relation to freedom of association and collective bargaining. The Group's Responsible Banking and Sustainability Policy considers it vital to observe standards, working conditions and rights of employees, such as their freedom of association and union representation, which are set out in standards, collective bargaining agreements and other agreements signed with the corresponding workers' legal representatives.

Dialogue takes place on a continuous basis through the Labour Relations division, addressing topics informally so as to speed up the process. There are also other channels that can be used to contact workers' union representatives, defined in the quarterly meetings held by the State Health and Safety Committee and the semi-annual meetings of the Equality Plan Monitoring and Assessment Committee.

Workers' representation structure

In Spain, the right to freedom of association is provided in the Workers' Statute and the Collective Bargaining Agreement for Banks. The Bank has nine trade union sections in Spain, which represent at least one person for each union section, and which operate on a State-wide and autonomous community basis.

Workers' representatives are voted in every four years, in accordance with the guidelines set forth in prevailing legislation and the implementing agreement enforced in the Spanish Banking Association (Asociación Española de Banca, or AEB), together with the most representative State union sections of the Spanish banking industry. The results of the union elections determine the composition of the various Works Councils, as well as staff delegates, who are the main points of contact representing the company and who take part in collective bargaining negotiations.

Diversity metrics

Gender diversity in top management

Women represent 54.6% of the total workforce as at December 2024.

Workforce breakdown by gender and professional category

Note: Group data as at 31/12/2024. 'Senior management' includes executive directors, senior management, general management, corporate directors and top management. 'Middle management' includes directors not included in the 'Senior management' category. In Spain, roles classified as technical roles are included in the 'Specialist staff' category, in accordance with the Collective Bargaining Agreement for Banks.

Workforce breakdown by age band

Group data as at 31/12/2024.

Workforce breakdown by country

Group data as at 31/12/2024. Workforce in the United Kingdom includes employees at TSB and at Banco Sabadell's London branch.

Promotions and gender representation initiatives

• Promotions given in 2024 through Banco Sabadell's Managerial Performance Evaluation Committee: 48% were given to women.
• Career Acceleration Programme (CAP) third edition in 2024: 102 participants, 61% women.
• Female Leadership Programme second edition: 24 women participants.
• Diversity Programmes for specific divisions: 42 women took part in first edition (2024).

Diversity in variable remuneration

The Synthetic Sustainability Indicator (SSI) includes gender diversity indicators (percentage of female representation in management) with a 20% weight.

Pay gap metrics

Pay gap based on average total remuneration

Pay gap based on median total remuneration

The overall pay gap is calculated as the average pay gap of each country weighted according to the percentage that their workforce represents out of the total.

Adjusted pay gap in Spain

In 2023, Banco Sabadell worked together with the Pompeu Fabra University on the certification of an econometric model to determine the adjusted pay gap in Spain.

Adequate wages

S1-10: Adequate wages

The Remuneration Policy ensures a competitive and fair remuneration system, in compliance with benchmark indices, that is capable of attracting and retaining the best talent, that is aligned with market standards and flexible enough to adapt to environmental changes and sector requirements, and that rewards professional experience and responsibility, irrespective of the employee's gender.

In this respect, the Policy applied in the Group is based on equal pay for male and female employees for equal work or work of equal value.

Real Living Wage (UK subsidiary - TSB)

TSB is the first UK retail bank accredited by the Good Business Charter, a national accreditation scheme that recognises businesses that behave responsibly and measures behaviour over 10 components including: real living wage, fairer hours and contracts, employee well-being, employee representation, diversity and inclusion, environmental responsibility, paying fair tax, commitment to customers, ethical sourcing and prompt payment.

Coverage and scope

No quantitative data is disclosed on the percentage of employees assessed against a living wage benchmark or the percentage earning at or above it. The real living wage reference applies only to TSB (UK subsidiary).

Benchmark methodology

No details are provided on how living wage is calculated, frequency of reassessment, or whether contractor wages are included. The disclosure does not specify the living wage benchmark used beyond the reference to "real living wage" in the context of TSB's Good Business Charter accreditation.

Targets

No forward-looking commitments or targets related to adequate wages are disclosed.

Training and skills development metrics

Training participation and investment

Active employees as at 31/12/2024. Training data refers to the entire Group.

Average training hours by professional category

Active employees as at 31/12/2024. Training data refers to the entire Group. 'Senior management' includes executive directors, senior management, general management, corporate directors and top management. 'Middle management' includes directors not included in the 'Senior management' category. In Spain, roles classified as technical roles are included in the 'Specialist staff' category, in accordance with the Collective Bargaining Agreement for Banks.

Average training hours by age range

Active employees as at 31/12/2024. Training data refers to the entire Group.

Average training hours by gender

Active employees as at 31/12/2024. Training data refers to the entire Group.

Additional context

97.8% of the Bank's employees received training during 2024, completing a total of 634,266 hours of training at the Group level (equivalent to an average of 23 hours per person). As at June 2024, in Spain, 18% of the training received was voluntary, compared to 30% in 2023. Up to December 2024, 78% of the training was completed online, compared to 74% in 2023.

97.4% of employees have completed at least one course on sustainability topics.

Health and safety metrics

Banco Sabadell Group adopts a policy of prevention and continuous improvement of people's working conditions and health that covers 100% of those working at Banco Sabadell Group.

Indicators of absence from work

Spain:

TSB (UK):

Mexico:

As at the end of December 2024, a total of 19 days off work had been recorded.

Work-related accidents

Spain - Types of accident:

Spain - Work-related accident metrics:

*Frequency rate: (Number of accidents (excluding those occurring whilst commuting) / theoretical working hours (according to collective bargaining agreement)) × 1,000,000

**Severity rate: (Working hours lost / theoretical working hours (collective agreement)) × 100

Rate calculations exclude accidents occurring whilst commuting.

Fatalities

No severe accidents were recorded during the period, nor were there any fatalities as a result of work-related accidents in 2024.

Subsidiaries

TSB, in compliance with UK legislation, does not keep a record of accidents, while Mexico did not record any accidents in 2024.

Work-life balance metrics

Scope and context

Banco Sabadell Group's workforce has at its disposal a series of work-life balance measures set out in the Equality Plan. These measures seek to ensure that the workforce have a good work-life balance and to establish a framework for flexible working hours that can be used to improve the balance between personal and professional interests under equal terms for both women and men.

All employees have access to a Guide to Work-Life Balance Measures available on the corporate intranet in the Equality and Diversity space.

Work-life balance measures available

Leaves of absence and special permissions:

• Extended leaves of absence or special permissions for unremunerated leave (improving on Article 36.2 of the Collective Bargaining Agreement for Banks)
• Unremunerated reductions of working hours (per Article 37.6 of the Workers' Statute and Article 35 of the CBA) for legal guardians responsible for:
  • A minor under the age of 12
  • A disabled person
  • A family member who cannot take care of themselves
• Remunerated reduction of working hours of one hour per day over a two-month period to care for a child under 12 or who requires hospitalization due to illness or serious accident

Parental leave provisions:

• Leaves of absence for the birth and care of a child are guaranteed
• Leave for nursing children: option to take 15 working days of remunerated leave following any period of contractual suspension
• Duration of leave for birth or care of a child: equivalent to Articles 48.4, 5 and 6 of the Workers' Statute
  • Total: 16 weeks
  • Mandatory uninterrupted period: 6 weeks of full working days immediately following birth
  • Remaining 10 weeks: may be taken in weekly periods, in one block or separate blocks, during the 12 months following birth

Working time flexibility:

• Flexibility to adapt working hours (start and finish times) for those responsible for:
  • Care of children below 14 years of age
  • Care of family members up to second degree of consanguinity or affinity who are disabled or above 65 years of age
• Telework and flexitime arrangements in corporate buildings
• Blended model: staff can work from home for a maximum of 6 days per month (voluntary, not contractually regulated)
• "My Workday" (Mi Jornada) tool for recording daily working hours in compliance with Royal Decree-Law 8/2019

Additional benefits:

• School allowance paid at the beginning of the academic year for each child between 0 and 23 years economically dependent on the employee
• Extended to age 26 for children with registered physical or mental disability of at least 33%
• Flexible compensation system including "Flex Daycare" to earmark part of salary for childcare with tax benefits
• Nursing rooms available at corporate buildings in Sant Cugat del Vallés, Madrid and Sabadell

Note on quantitative metrics

The company references S1-15 Work-life balance metrics in its reporting structure and describes comprehensive work-life balance policies and measures. However, the specific quantitative metrics required by ESRS S1-15 (percentage of employees entitled to family-related leave and percentage who took it, broken down by gender) are not disclosed in the excerpts provided. The disclosure focuses on qualitative descriptions of available measures rather than uptake statistics.

Compensation metrics

Pay gap

Banco Sabadell discloses both unadjusted and adjusted gender pay gaps.

Unadjusted (gross) gender pay gap:

As at the end of 2024, the gross (unadjusted) overall gender pay gap in Banco Sabadell Group was 23.02% (average) and 17.13% (median).

Pay gap based on average total remuneration:

Pay gap based on median total remuneration:

Note: The overall pay gap is calculated as the average pay gap of each country weighted according to the percentage that their workforce represents out of the total.

The gross pay gap indicator is calculated in accordance with Royal Decree 902/2020, where total remuneration is calculated in real terms (annualised fixed salary, variable remuneration and any salary/non-salary supplements actually received) and represents the difference between male and female salaries in average terms or in median terms in an organization/professional category.

Adjusted gender pay gap:

In 2023, Banco Sabadell worked in collaboration with the Economics and Business Department of the Pompeu Fabra University on the certification of an econometric model to determine the adjusted pay gap in Spain.

Adjusted pay gap in Spain:

The adjusted pay gap removes the effect of staff- and job-related characteristics on pay. If the effect of these characteristics is removed from the basic pay gap, the adjusted pay gap becomes 4.80% based on the average and 2.64% based on the median. The inclusion of specific job-related characteristics goes a long way in explaining the observed pay gap.

Remuneration ratio

Banco Sabadell calculates the annual total remuneration ratio as the ratio of total remuneration of the highest-paid individual (excluding Executive Directors) to the median/average annual total remuneration of all employees.

In 2024, the remuneration of the highest-paid individual was 30.06 times higher than the median remuneration of all other employees and 22.26 times higher than the average remuneration.

Methodology

Total remuneration is calculated according to the specifications of Royal Decree 902/2020, applicable in Spain, whose criteria have been extrapolated to other geographies, considering fixed remuneration in annualised terms and all other components based on the sum actually received in the past 12 months. Uniform criteria are applied, both in the calculation of this ratio and in the corresponding pay gap indicators.

Median/average annual total remuneration for all employees (excluding the highest-paid individual) is calculated as the weighted average of the median/average remuneration of each geography according to the weight of the total workforce of each country, without applying any correction factor linked to the cost of living in each country.

Incidents, complaints and severe human rights impacts

The Group has not received any workplace complaints related to human rights from its own workforce, nor any complaints of forced or child labour.

In 2024 the Harassment Prevention Committee dealt with a total of 16 complaints of harassment, all in relation to workplace harassment.

In 2024, there were no records of any penalties or compensation for injury and damages as a result of any cases of discrimination and harassment.

In addition, 43,101 consultations were received from the Assistance and Grievances Office (AGO) detailed in section 5.2.3.3. S1-3: Processes to remediate negative impacts and channels for own workers to raise concerns.

Summary of incidents and complaints (2024)

Policies related to consumers and end-users

Banco Sabadell has established policies to ensure transparent, responsible communication and data protection for its consumers and end-users.

Commercial Communication Policy

Scope: All marketing activity carried out by Banco Sabadell in the Spanish territory under any of its commercial brands, including all commercial communications and information aimed at the general public (customers, potential customers, investors, etc.).

Governance: The Board of Directors is responsible for approving the Commercial Communication Policy.

Key content and principles:

• The Institution promotes transparent information and responsible, straightforward and friendly communication with its customers
• Undertaking to engage in lawful, proper, loyal, truthful, clear and transparent publicity
• Based on respect for people's dignity and the recognition of the rights and interests of consumers
• Aligning with the principles of fair competition in business
• General criterion that when designing publicity campaigns, it is necessary to consider the nature and complexity of the product or service being offered, the characteristics of the distribution methods used, and the target market at which they are aimed
• Complies with legal standards on the recognition and protection of the rights and interests of consumers

Public availability: Available to all employees on the corporate intranet.

Implementation and monitoring:

• The Bank has mechanisms in place to ensure that all information provided to customers is transparent and that all products and services offered are suited to their needs
• Before marketing a new product or service, an internal workflow ("Product Workflow") is followed where relevant areas review various aspects to ensure conformity with established standards
• Validation by the areas involved is ultimately ratified by the Technical Product Committee
• Every year, different units responsible for the product offering perform an in-depth review of the conditions of the products and their impact on customers to ensure products continue to be suitable for the target audience
• This review process falls within obligations required by customer and investor protection regulations, such as the Guidelines on Product Oversight and Governance Arrangements for Retail Banking Products and the MiFID II Directive

Personal Data Protection and Privacy Policy

Scope: Applicable to all personal data processing activities that take place in Banco de Sabadell, S.A., both automated and non-automated.

Governance: Reviewed annually and approved by the Board of Directors.

Key content and principles:

• Designed as an internal organisational instrument to ensure the protection of natural persons in connection with personal data processing
• Indicates the policies and related procedures and defines the management and control model established in relation to data protection
• Determines the controls needed to ensure compliance with data protection legislation

Public availability: Published on the Bank's work tool and is available to all employees. The Bank publishes information relating to its "privacy policy" and "privacy notice" on its website, in the section on customer information, in a document called "Annex of detailed information on personal data protection" published in all of Spain's official languages and also in French, English and German.

Links to international standards: The document mentions compliance with data protection legislation and regulatory requirements.

Implementation and monitoring:

• Three lines of defence model implemented:
  • First line: Business areas responsible for implementing and executing controls
  • Second line: Compliance (Data Protection Officer) determines controls, liaises with Control Board, deals with queries and complaints, defines data protection policy, advises and oversees implementation
  • Third line: Internal Audit supervises activities of first and second lines, reviews control environment and fulfilment and effectiveness of policies and procedures
• All employees complete mandatory training on personal data protection
• Depending on professional duties, employees receive specific training imparted by the Data Protection Officer (DPO)
• Communication channels provide 'brief training capsules' to remind employees of obligations
• Annual plan setting out necessary measures to monitor and supervise compliance submitted to Management Committee
• Every six months, a Supervision and Control Plan monitoring report sent to Management Committee and Board Risk Committee
• Annual Data Protection Report compiled and Data Protection Officer's Report issued, submitted to Management Committee, Board Risk Committee and Board of Directors
• Procedure for analysing and evaluating security incidents to determine whether an incident concerns personal data
• Security breach assessments carried out by the Data Protection Officer and documented
• 14 security incidents were recorded in 2024, but it was not necessary to inform either the Control Board or the data subjects

Additional policies for subsidiaries

TSB (United Kingdom):

• Has a Data Privacy Policy requiring personal data to be processed correctly and legally and used only for specific purposes
• Published on corporate intranet and available to all employees
• Approved by TSB's Executive Policy Owner
• TSB has its own Data Protection Officer
• Annual training dedicated to privacy and data protection required for all employees
• Data Privacy Office tests design and operational effectiveness of controls annually

Banco Sabadell Mexico:

• Complies with Personal Data Privacy Manual in accordance with Mexican personal data protection legislation
• Accessible to all employees through SharePoint
• Establishes and defines policies and procedures in relation to personal data protection and privacy
• Considers legal and regulatory factors established in the Law on Credit Institutions and other Mexican legislation
• Assistant General Managers of Compliance and Legal Advice hold highest level of responsibility for application of the manual
• Has a Process for Upholding Rights of Access, Rectification, Objection and Erasure/Right to be Forgotten

Taking action on material impacts on consumers

Banco Sabadell Group plays a fundamental role in access to products and services and non-discrimination through the initiatives related to vulnerable customers, Sogeviso, the Code of Good Practice, BStartup, Cybersecurity and Data Protection.

DANA flash floods response

Various measures have been taken to help those affected by the DANA flash floods (described in section 5.3.2.2 ESRS 2 SBM-3).

Over-indebtedness mitigation

Credit Risk Granting Procedure: For new requests from retail customers, Banco Sabadell has implemented:

• Automated analysis tools
• Evaluation of customers' ability to fulfil payment obligations
• Consideration of possible situations from increased expenditure
• Objective: Protect customers and prevent over-indebtedness
• Scope: Own operations (retail customer credit granting)

Human rights complaints management

• None of the complaints or claims received in 2024 through the SAC affected the vulnerability of consumers or end-users in relation to human rights
• Resources allocated: Necessary staff and economic resources allocated to ensure all material incidents are managed

Banco Sabadell Private Foundation

The Group contributes positively to social outcomes for consumers and end-users through the Banco Sabadell Private Foundation, driving progress and social welfare by promoting:

• Culture and the arts
• Research and education
• Fostering young talent

Resources allocated (2024):

• €5 million endowment from Banco Sabadell for the annual Action Plan
• €3,798,034 allocated by year-end for collaborations with other institutions

Monitoring and evaluation:

• Supporting documents requested at start and end of collaborations
• Verification of correct fund allocation and activity completion
• Evaluation based on indicators measuring project suitability
• Medium and long-term results analysis
• Evaluation matrix for objective and transparent resource distribution
• Efficient allocation according to entity and project needs

Action areas:

1. Research and education
2. Culture and the arts

Vulnerable customer initiatives

Detailed actions for vulnerable customers are described in sections:

• Digital vulnerability reduction initiatives (2024)
• Mobile branches
• Agreement with Correos for cash withdrawals
• Accessibility measures (European Accessibility Act compliance)
• Code of Good Practice
• Sogeviso

Targets related to consumers

Banco Sabadell has set various targets aimed at reducing negative impacts, advancing positive impacts and managing the risks and opportunities of end consumers. These targets are part of Sabadell's Commitment to Sustainability launched in 2022, with specific targets for 2025-2050 across four strategic pillars.

Financial Products and Services for Sustainable Economy

Financing to Micro-enterprises

Innovative and High-Impact Startups

Financial Education Programmes

Social Impact Projects

Culture and Talent Promotion

Data Privacy and Cybersecurity

Business conduct policies and corporate culture

Banco Sabadell has established a comprehensive set of policies that govern business conduct and corporate culture across the Group. These policies are designed to ensure ethical behavior, compliance with legislation, and responsible business practices.

Banco Sabadell Group Code of Conduct

Scope: All governing bodies, employees, external suppliers and business partners across all jurisdictions and territories where the Group operates.

Governance: Approved by the Board of Directors. Regularly reviewed and updated. Overseen by the Corporate Ethics Committee (CEC), which reports directly to the Board of Directors.

Key content/principles:

• Defines criteria for ethical and responsible behavior in internal relationships and with customers, suppliers, shareholders, investors and stakeholders
• Based on 13 core principles: Will to serve, Proximity, Adaptability, Commercial approach, Innovation, Professionalism, Ethical behaviour, Sustainability, Austerity, Prudence, Teamwork, Compliance, Transparency, and Respect for privacy
• Promotes equal opportunities in access to work and career advancement, ensuring no discrimination based on race, sex, ideology, nationality, religion, sexual orientation or any other personal, physical, psychological or social condition
• Guides decision-making towards reducing the gender pay gap
• Establishes obligations and duties governing actions of all those within the Group

Public availability: Published on the Bank's corporate website and corporate intranet.

Monitoring implementation: All staff must formally declare their commitment through a personal and tailored adoption process. Completion is monitored on a weekly basis. As of the reporting date, 98.9% completion of mandatory training on the Code of Conduct.

Banco Sabadell Group Anti-Money Laundering and Counter-Terrorist Financing Policy

Scope: All entities of the Group, incorporating local regulations of the jurisdictions in which it is present.

Governance: Approved by the Board of Directors. Internal Control Body (ICB) meets regularly to oversee implementation and effective fulfillment. AML/CFT units integrated in the second line of defense.

Key content/principles:

• Establishes basic principles, critical management parameters, governance structure, roles and responsibilities, procedures, tools and controls applicable in relation to AML/CFT
• Describes main procedures through which Money Laundering and Terrorist Financing risks should be identified and managed at all levels of the Group
• Based on three lines of defense model

Links to international standards:

• Recommendations issued by the Financial Action Task Force (FATF)
• The Wolfsberg Group guidelines
• Basel Committee on Banking Supervision (BCBS)
• Spain's Commission for the Prevention of Money Laundering and Monetary Offences guidelines

Monitoring implementation: Each Group entity has an annual training plan. In 2024, the external expert review noted that Banco Sabadell Group has adequate control and detection systems designed to comply with anti-money laundering and counter-terrorist financing regulations. The ML/TF risk management model is reviewed annually by independent experts.

Banco Sabadell Group Sustainability Policy

Scope: The Group's activity and organization.

Key content/principles:

• Frames the Group's activity and organization within ESG parameters, incorporating environmental, social and governance factors in decision-making
• Establishes principles: contribution to sustainable development, prudence, transparency, security, diversity, commitment to society, environmental protection, respect for fundamental human rights, and professional development

Banco Sabadell Director Selection Policy

Scope: Board of Directors members.

Governance: Administered by the Board Appointments and Corporate Governance Committee.

Key content/principles:

• Establishes principles and criteria for selection processes, initial fit and proper assessment, ongoing assessments, and re-election of Board members
• Governed by the principle of diversity
• Ensures candidates meet requirements of repute, suitability and good governance
• Ensures Directors' mandates are renewed in an orderly and well-planned manner
• Ensures compliant qualitative composition where External and Non-Executive Directors account for at least the majority

Banco Sabadell Group Remuneration Policy

Scope: All Banco Sabadell Group companies and employees.

Governance: Based on principles approved by governance bodies.

Key content/principles:

• Based on three main principles: (1) Promote business and social sustainability in the medium-long term; (2) Ensure competitive and fair remuneration system; (3) Reward performance
• Integrates sustainability risks and promotes environmental, social and governance actions
• Ensures equal pay for male and female employees for equal work or work of equal value
• Variable remuneration linked to financial and non-financial criteria, including indicators in environment, society, diversity and gender equality

Monitoring implementation: Remuneration components contribute to the promotion of ESG actions to make the business strategy sustainable and socially responsible.

Corporate Crime Prevention Policy

Scope: The entire organization.

Governance: Overseen by the Corporate Ethics Committee (CEC).

Key content/principles: Part of the Corporate Crime Prevention and Anti-Corruption Management and Organisation Model, which is re-evaluated annually. All workforce required to personally and individually undertake to follow this policy on a regular basis.

Monitoring implementation: 99.5% completion of mandatory training on Corporate Crime Prevention.

General Policy on Conflicts of Interest

Scope: The entire organization.

Governance: Overseen by the Corporate Ethics Committee (CEC).

Monitoring implementation: Employees receive mandatory training on identification, reporting and management of conflicts of interest through the Code of Conduct training.

Anti-Corruption Policy

Scope: Directors, legal representatives and employees of the Group; all natural and legal persons providing services in the Group; collaborating partners, professionals or entities subcontracted by the Group.

Governance: Overseen by the Corporate Ethics Committee (CEC). Part of the Corporate Crime Risk and Anti-Corruption Management and Organisation Model, re-evaluated annually.

Key content/principles:

• No distinction made between areas with greater or lesser exposure to corruption and bribery risks
• Establishes measures to prevent corruption
• Covers risks related to corruption

Public availability: Published on the corporate website and corporate intranet.

Monitoring implementation: All workforce required to personally and individually undertake to follow this policy on a regular basis and whenever significant changes take place. 99.2% completion of mandatory Anti-Corruption training. As a result of activities in 2024, 2023, 2022 and 2021, no risks related to corruption materialized.

Policy on the Internal Reporting System and Protection of Reporting Persons

Scope: The whole of Banco Sabadell Group in all matters that do not conflict with applicable legislation in the corresponding jurisdiction.

Governance: Board of Directors is responsible for implementing the Internal Reporting System. Corporate Ethics Committee (CEC) is responsible for managing it. Compliance division is responsible for policy development and wording.

Key content/principles:

• Sets out general principles of the Internal Reporting System and Protection of Reporting Persons
• Covers the internal communication system and corresponding channels
• Ensures anonymity and confidentiality of reporting persons
• Ensures absence of retaliation against reporting persons acting in good faith
• Provides mechanisms for reporting breaches of the Code of Conduct, internal/external regulations, and potential commission of crimes

Links to international standards: Complies with Directive (EU) 2019/1937, transposed into Spanish law through Law 2/2013.

Public availability: Whistleblowing channel accessible through the Banco Sabadell Group website (https://canaldenunciESGrupo.bancsabadell.com).

Monitoring implementation: CEC prepares quarterly reports. Board Audit and Control Committee and Board of Directors informed semi-annually of number of reports, channel of origin, type of report, type of reporting person and investigation outcomes. 97.5% completion of mandatory training on the whistleblowing channel and protection of reporting persons. In 2024, 74 reports were received, 31 admitted for processing and investigated.

Internal Code of Conduct relating to the Securities Market (Reglamento Interno de Conducta, or RIC)

Scope: Employees affected by securities market activities.

Governance: Overseen by the Corporate Ethics Committee (CEC).

Key content/principles:

• Explains what the code consists of, whom it affects and what restrictions it imposes
• Covers circumstances requiring compliance and associated obligations
• Covers breaches, penalties and the role of the Corporate Ethics Committee

Monitoring implementation: 99.0% completion of mandatory training on the RIC.

Human Rights Policy

Scope: Own operations, suppliers, commercial partners, and communities in which the Group operates.

Key content/principles:

• Establishes basic principles of action and mechanisms to identify, prevent, mitigate and/or remedy potential negative impacts on human rights
• Covers granting finance to companies, human resources management model, and supplier engagement processes
• Considers impact on four main stakeholder groups: Group employees, customers, suppliers and commercial partners, and communities/environment
• Requires employee training in all these areas

Links to international standards:

• United Nations Guiding Principles on Business and Human Rights
• Universal Declaration of Human Rights
• International Labour Organisation's Declaration on Fundamental Principles and Rights at Work
• United Nations Principles for Responsible Investment

Supplier Code of Conduct

Scope: All suppliers and business partners.

Governance: Updated following review of the Group's Code of Conduct.

Key content/principles:

• Incorporates aspects related to the Group's model for organization and management of crime risk
• References the Corporate Ethics Committee as the most senior supervisory body
• Covers control of the whistleblowing channel
• Suppliers must comply to complete accreditation process

Links to international standards:

• United Nations' Universal Declaration of Human Rights
• International Labour Organisation's conventions
• United Nations' Convention on the Rights of the Child
• Principles of the United Nations Global Compact (signed by the Group in February 2005) in the areas of human rights, labour, environment and freedom of association

Public availability: Published on the corporate website.

Procurement Policy

Scope: The Group's procurement activities and all third-party engagements.

Governance: Reviewed and approved annually by the Board of Directors.

Key content/principles:

• Establishes mechanisms and controls to ensure adequate management of actual and potential impacts of all third-party engagements
• Four core principles: (1) Cost-benefit analysis; (2) Competition guarantee; (3) Preservation of capabilities and responsibilities; (4) Sustainability
• Ensures promotion of suppliers that apply best practice in ethics, governance, society and environment
• Standard contracts include clauses on respect of human rights and observance of UN Global Compact principles
• Includes clauses on labour rights, fight against corruption, restrictions on lending and investment in arms industry, and equality plan

Links to international standards: References United Nations Global Compact on human rights, labour rights, fight against corruption.

Monitoring implementation: Supplier accreditation process ensures compliance. Suppliers must provide CSR policy and sustainability information. ESG ratings assigned to suppliers. For Spain (over 73% of third-party billing), uses "RePro" rating system. Regular validation checks ensure documentation is up to date.

Policy on the Outsourcing of Functions

Scope: All outsourcing activities.

Governance: Reviewed and approved annually by the Board of Directors.

Key content/principles:

• Describes entire supplier relationship process from accreditation through service delivery, management and oversight
• Includes sustainability principle in outsourcing policies
• Ensures suppliers apply best ESG practices

Tax Risk Policy

Scope: All companies controlled by the Group, regardless of geographical location.

Governance: Embedded in Banco Sabadell Group's Global Risk Framework. Governance structure based on three lines of defense.

Key content/principles:

• Ensures tax risks affecting tax strategy are identified, assessed and managed systematically
• Establishes categorization and proactive management of tax risks
• Ensures direct involvement of governing and management bodies
• Clear assignment of roles and responsibilities with adequate separation and independence

Information Systems Security Policy

Scope: The Group's information systems.

Key content/principles: Prior to engaging potentially sensitive services, an analysis is conducted regarding information security and protection of data owned by the Group and to which suppliers have access. Specific monitoring exercises are carried out depending on supplier's inherent risk.

Personal Data Protection and Privacy Policy

Scope: Personal data processing activities.

Key content/principles: One of the core principles in the Code of Conduct is respect for privacy and intimacy of data subjects whose personal data is subject to processing.

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Overall governance and culture

The Corporate Ethics Committee (CEC) reports directly to the Board of Directors and is ultimately responsible for adopting policies on corporate reputation and ethical behaviour. The CEC's core mission is to promote ethical behaviour of the organization to ensure compliance with the action principles set out in the various policies listed above.

All policies are published on the Bank's corporate website and corporate intranet available to all employees. The Bank has established a comprehensive training program with mandatory courses on key policies, achieving completion rates between 97.5% and 99.5% across different policy areas.

The whistleblowing channel provides a mechanism for reporting breaches and is protected by strong confidentiality and non-retaliation provisions. In 2024, none of the reports received resulted in confirmation of cases related to corruption, bribery, or human rights violations.

Incidents of corruption or bribery

Confirmed incidents

In 2024, there were no confirmed incidents of corruption or bribery in the Institution.

Convictions and fines

In 2024, there have been no convictions or fines for breaches of anti-corruption and bribery laws.

Disciplinary actions

No employee has been dismissed or penalised internally for incidents related to corruption or bribery in 2024.

Contracts terminated

No contract with business partners has been terminated or not renewed due to infractions related to corruption and bribery in 2024.

Public legal cases

At present, there have been no public legal cases regarding corruption or bribery brought against the undertaking and its own workers during the reporting period or during previous years.

Investigation and speak-up procedures

The Group has an Internal Reporting System with a whistleblowing channel available to stakeholders, hosted on a platform accessible through the Banco Sabadell Group website (https://canaldenunciESGrupo.bancsabadell.com). The channel has a specific area dedicated to submitting reports of 'corruption / bribery'. The Corporate Ethics Committee (CEC) is responsible for managing the Group's Internal Reporting System and the whistleblowing channel.

Key protections and procedures include:

• Anonymity and confidentiality: Staff may submit reports on a named or anonymous basis. Identity and personal data of reporting persons are kept under strict confidence.
• Protection from retaliation: Any act that constitutes retaliation against reporting persons acting in good faith is declared invalid. Measures are adopted to prevent and avoid retaliation.
• Investigation process: All reports are duly investigated and processed according to established procedures, including receipt acknowledgment, admissibility assessment, investigation, and resolution.

In 2024, a total of 74 reports were received through the channel. Of the 31 reports processed and investigated, none resulted in confirmation of cases related to corruption or bribery. This aligns with the results from previous years (2023, 2022, and 2021), where no risks related to corruption materialized.

The Institution has a Corporate Crime Risk and Anti-Corruption Management and Organisation Model in place, which is re-evaluated annually and has its own specific section on the fight against corruption. The Bank's Anti-Corruption Policy defines all acts that would qualify as corruption and prohibited actions, available to the entire workforce and business partners.

All staff are required to complete mandatory training courses on anti-corruption and corporate crime prevention, with 99.2% completion rate for anti-corruption training and 99.5% for corporate crime prevention as of the reporting period.

Payment practices

Banco Sabadell's UK subsidiary TSB is a member of the Prompt Payment Code.

No quantitative metrics on average payment time, contractual payment terms, late payments, or legal proceedings for late payment are disclosed.