Biodiversity, which is the variety of life on Earth, is declining faster than at any other time, in human history. One-quarter of species globally are threatened, and around one million animal and plant species face extinction.1 Many of the natural ecosystems that provide us with clean water, fresh air, and food are in decline. This poses significant risks to economic activities, as it is estimated that more than half of the world’s GDP is moderately or highly dependent on nature.2 There are major challenges to achieving the Sustainable Development Goals, with over two billion hectares of land on earth degraded, affecting the lives and livelihoods of some 3.2 billion people.3 For example, the SDG goals of decent work and economic growth4, as well as good health and well-being5, cannot be achieved if the degradation of life on land and life below water,6 are not addressed. The NGFS7 Study Group on Biodiversity and Financial Stability, of which the Bank is a member, has investigated growing evidence that biodiversity loss has implications on the economy and financial stability. Exploratory studies have also been conducted in the Netherlands, France, Brazil, Mexico – and now Malaysia – to understand the dependencies and impacts of the financial sector on biodiversity. This growing body of knowledge around climate and environmental risks, highlights the fact that climate change and the loss of nature are inseparable concerns. Nature loss compounds the effects of climate change, and climate change drives nature loss.

Whether your firm is a lender or a borrower, you must be ready to transact any new or refinanced lending on a non-LIBOR basis next year, a point underscored in a joint statement by US regulators last week. For firms with further to go, that could mean: spending time understanding the new non-LIBOR products; completing governance processes; or adapting systems. 6  https://www.bankofengland.co.uk/news/2020/september/fca-and-boe-joint-statement-on-sonia-interest-rate-swap Other than for risk management of existing positions. For sterling market milestones, see https://www.bankofengland.co.uk/-/media/boe/files/markets/benchmarks/rfr/rfr-working-grouproadmap.pdf 7 8  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  But whatever it is you need to do, make sure you’re not left behind. Help is available from your banks, trade associations and industry working groups.9  2. Adopting the ISDA fallbacks for existing derivatives  Redirecting new business away from LIBOR is the critical step for securing the future. But we must ensure that LIBOR-linked business from the past is made safe too. The vast majority of that business, by value, lies in the hundreds of trillions of dollars of LIBOR derivatives contracts stretching beyond end-2021. Leaving those contracts without clarity when LIBOR ends is unthinkable – but so is the idea of negotiating over each contract individually to achieve that. That’s why ISDA, supported by the Financial Stability Board (FSB), has worked with market participants and regulators over many years to identify a fair and robust mechanism for these contracts to convert to risk-free rates.