Sustainable Finance

Santander Acquires 80% Stake in ESG Consultancy Firm WayCarbon

Published on: 10 March 2022 08:07 PM
by KnowESG

A Brief Summary

Santander Group has recently announced that it has struck an agreement to acquire an 80 per cent stake in WayCarbon, a Brazil-based leading ESG consultancy firm that has been advising public and private companies on climate issues and helping them implement strategies to enhance sustainability over the last 15 years.

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The agreement will bolster Santander's environmental, social and governance (ESG) expertise, allowing the company to help and support customers in their energy transition. WayCarbon's association with Santander will provide a global client platform for its already established business model.

WayCarbon has been a leading ESG firm helping public and private organisations in their energy transition for 15 years now, with 170 employees working with clients across 18 countries. It operates its business by providing clients with three core services: ESG consultancy, management software to support the tracking and implementation of ESG strategies and carbon credit rating.

Santander can enhance its ESG objectives further through the acquisition by involving reforestation, voluntary carbon market, forest conservation programmes and other emission trading schemes.

Companies, non-profit organisations, individuals and governments can buy and sell carbon offset credits in the carbon market, which is an instrument that represents the reduction of a specific amount of emissions.

José M Linares, global head of Santander Corporate & Investment Banking (Santander CIB), said: “As an industry leader in ESG, WayCarbon will help us with our objectives and our clients in their transition to more sustainable business models. Santander has vast experience in sustainable projects and is a global leader and pioneer in renewable energy finance. This deal will help maintain Santander at the forefront of this critical space”.

WayCarbon CEO Felipe Bittencourt said: “WayCarbon, which has B-corp certification reflecting its commitment to generating profit with a purpose, is focused on catalyzing the transition to a low-carbon economy and has been growing fast in the last few years. This agreement with Santander will expand our business's global scale, with specialized products and services for a wider range of companies in its ten core markets in Europe and the Americas, so we’ll have a greater impact”.

Santander looks forward to raising €120 billion in green finance between 2019 and 2025 and €220 billion by 2030 as part of the responsible banking programme to support its clients in transitioning to a low-carbon economy.

In its activities, it is already carbon neutral. Santander will align its power generating portfolio with the Paris Agreement by 2030 to achieve net-zero emissions for the whole group by 2050, in support of the Paris Agreement goals and the transition to a low-carbon economy.

The deal, which is likely to conclude in the second quarter of 2022, will have a negligible impact on the group's capital and produce a 30-50 per cent return on invested capital in 3-4 years, subject to closing conditions.