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Santander Brasil – Gender Bond

Project number 11362-05

Country Brazil

Sector Financial Institutions

Status Proposed

Basic information

Company name
Banco Santander (Brasil) S.A.

Investment type Loan

E&S category
FI-2

Disclosed date
10/28/2020

Projected board date
02/03/2021

Team Leader
Groszmann Faria, Marcia

Financiamiento

Financing Requested
Up to US$100 million

Financing Currency

BRL

Client
information

Contact Names: Eugenio Pagotto / Carolina Baruque
Title: Structure Finance Associate
Telephone numbers: +55 113012-6753 / +55 113553-0673
Email: eugenio.pagotto@santander.com.br / chbfarias@santander.com.br

Project
Scope
and
Objective

This project will help Santander Brasil structure a financing to increase its lending portfolio to women owned enterprises. The loan amount will be denominated in Brazilian Real for the equivalent of up to US$100 million with a three-year term bullet. The financing will be structured as a debt instrument, and may be a Letra Financeira, that will be fully subscribed by IDB Invest.

Environmental
and
Social
Review

Scope of Environmental and Social Review. The Environmental and Social (“E&S”) review of the proposed transaction was carried out through desk research, a client visit, and a portfolio review. Santander is an existing client of the IDB Group and has a well-established Environmental and Social Management System (“ESMS”) and track record of Environmental & Social (“E&S”) management.
Environmental and Social Categorization and Rationale. The proposed transaction is classified as an FI-2 per IDB Invest’s Sustainability Policy. Underlying loans to be supported under the gender bond will focus on women-owned SMEs. The sub-loans average less than US$1.8 million. This transaction will not fund Category A sub-projects, representing corporate or project finance transactions.
Environmental and Social Risks and Impacts. The main E&S risks of this projects are associated with the Financial Institution’s (“FI”) capacity to identify and manage the E&S risks associated with its lending activities. Santander’s capacity in this respect is considered high, given its leadership as an Equator Principles bank and long-standing work in all aspects of E&S management. The Environmental, Social, Health and Safety (“ESHS”) impacts and risks associated with loans to Small and Medium Enterprises (“SMEs”) are likely to be moderate in nature. Santander’s portfolio of women-owned SMEs is concentrated in commerce and services, as well as exposure to industry and agribusiness sectors. The average tenor of the portfolio is between 1-3 years.
Mitigation Measures. Santander has a robust portfolio-wide ESMS and a team of seven individuals in Brazil that undertake E&S analysis. The scope of analysis of the E&S Risk team goes beyond project finance deals to include reviews of clients with annual sales of over 20 million Reals, as well individual farmers and ranchers. The E&S Risk team dedicates about half of its time to analyzing retail clients. The extent of issues assessed include project impacts, water stress and sources of water, validity of licenses, pollution and fines, and supply chain concerns among others. Within the SME segment, larger medium-sized companies do receive screening against a general checklist. All clients, including those not reviewed by this team, undergo reviews against an exclusion list and slave labor list. Santander is a founding member of the United National Environment Program (“UNEP”) Finance Initiative’s recently launched Principles for Responsible Banking. Santander will be required to ensure that all sub-loans supported under the loan comply with IDB Invest’s Exclusion List, applicable E&S local laws, and Santander’s ESMS.
Environmental and Social Action Plan Not Applicable.
Contact Information For project inquiries, including E&S questions related to an IDB Invest transaction, please contact the client (see Investment Summary tab), or IDB Invest using the email divulgacionpublica@iadb.org. As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism by writing to mecanismo@iadb.org or MICI@iadb.org, or calling +1(202) 623-3952.

For inquiries, comments and requests about the project

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