irene espinosa cantellano : moving beyond climate - the relevance of biodiversity loss for the financial system keynote ( virtually ) by ms irene espinosa cantellano, deputy governor of the bank of mexico, at the green banking webinar series " biodiversity finance : its intersection with the financial sector ", green banking academy, international finance corporation, world bank group, 27 january 2023. * * * it is a great pleasure for me to join this webinar to endorse the binding commitment that, as part of society, we must reiterate to keep aware of the risks that climate change and biodiversity lossimply for the financial system and the economy. underestimation of biodiversity loss risks we should recognize and internalize that biodiversity lossis a severe threat, not only to solving the profound economic and social problems that we face, particularly in emerging and developing economies but also to our very own survival as human species. in the last decades, significant efforts have been taken to include physical and transition risks in financial institutions'risk analysis frameworks, supported by extensive scientific and academic works. however, it is undeniable that we must accelerate the pace to incorporate a critical risk that has been underestimated : the risk associated with biodiversity loss in our ecosystems. there might not be enough work yet to fully understand biodiversity loss's consequences and actual costs. we must also be aware that biodiversity loss could potentially exacerbate climate change risks. importance of biodiversity for life and the economy biodiversity and renewable natural capital provide many services necessary to our subsistence and quality of life. for instance, forests provide clean air, store carbon, and are a source of fresh water - on which humans and many species depend - to avoid soil erosion and provide several other valuable ecosystem services. marine flora and fauna, like coral reefs and fish banks, have an enormous value for our societies and not only for the local communities, which have lived and looked after them for generations. coral reefs and mangroves are also necessary to protect the shores and avoid inland flooding. globally, we have already changed almost three - quarters of the earth´s surface and two - thirds of the oceans, placing countless animals and plants under threat of extinction and destroying half of the world´s coral reefs. but we are immersed in nature and dependent on it in many different ways. natural capital is vital for the economy, with more than 50 % of the global gdp being highly or moderately reliant on nature. 1 / 5

the road through a more effective rule of law, better public security, and improvement to mexico ’ s physical infrastructure. for a discussion of the u. s. - mexico economic relationship, see villarreal, m. a. ( 2015 ). u. s. - mexico economic relations : trends, issues, and implications. washington, dc : congressional research service, pp. 1 – 9. for an online progress report on mexico ’ s structural reforms, see presidencia de la republica, reformas en accion, http : / / reformas. gob. mx. bis central bankers ’ speeches growth and financial developments let me move on to the second part of this talk, which covers shorter - term developments. on a year – on - year basis, since 2014 mexico ’ s gdp has grown at an average rate of 2. 3 percent, not far from the historical performance, with a dip occurring in the second quarter this year. behind this relatively stable backdrop in the past two and a half years, two opposing forces have been at play. momentum in services has been offset by a slowdown in industrial production. softening industrial output in mexico seems to result from two shocks. one is falling oil extraction due to the near depletion of pemex ’ s most profitable oil fields. the other is slowing u. s. industrial production. consistent with this panorama, manufacturing exports to the united states have been on the downswing, aggravating the drag exerted by low demand for mexican products from other countries. u. s. manufacturing appears to have a larger impact on mexican exports to the u. s. than does the bilateral exchange rate. econometric estimates for the long - term behavior of mexican manufacturing exports to its northern neighbor point toward an elasticity to u. s. manufacturing production almost four times as high as that for the bilateral real exchange rate. 3 however, a weaker peso may be partly responsible for the fact that mexican exports have captured greater u. s. market share. for example, in the last four and a half years, the share of mexico ’ s automotive exports in total u. s. automotive imports has increased by almost five percentage points. private consumption has been a driver of economic expansion, partly compensating for the loss of steam from external demand. consumption growth seems to have been supported by several factors, including improvement in labor market indicators. since 2012, the unemployment rate has fallen from five percent to less than