MSCI has acquired First Street, a physics-based climate risk data and analytics specialist, in a move designed to deepen its physical climate risk offering for financial institutions worldwide.
The deal brings First Street’s multi-hazard modelling capabilities into MSCI’s existing climate and geospatial solutions, enabling quantified assessments of physically relevant climate risk across more than 2 billion structures globally. First Street’s own research indicates that companies have become more than 6.5 times as likely to issue profit warnings in the wake of extreme weather events over the past two decades.
First Street’s models incorporate climate signals and are validated against observed events, assessing both current and future exposure to physical risk, asset damage and business interruption. Underpinned by proprietary data on building characteristics, infrastructure dependencies and site-level adaptation measures, the platform translates physical hazards into measurable financial impact estimates. Users can access these insights through an interactive, AI-enabled workflow offering visualisations and on-demand analytics at the level of individual properties, companies or portfolios.
The expanded capabilities are also intended to assist institutions in meeting growing regulatory and reporting obligations, while supporting broader physical risk management and resilience planning. The trend towards location-based risk analysis is already visible in major European central banks’ use of MSCI data to identify climate risks across their loan books.
MSCI is a global provider of investment tools and research, with long-standing expertise in climate scenario analysis, geospatial intelligence and transition finance. The acquisition builds on this foundation, adding property-level climate science to its existing suite of sustainability and climate products.
The combination of the two firms reflects broader market pressure from investors, financial institutions and corporates seeking physical climate risk insights that are embedded directly into investment and risk workflows, rather than treated as a standalone compliance function. As extreme weather and geopolitical disruption increasingly make asset location a critical factor in evaluating risk and opportunity, banks, insurers, asset managers and asset owners are under growing pressure to act on location-based data.
MSCI head of sustainability and climate Richard Mattison said, “The financial consequences of where assets are located have come into sharp focus due to the recent geopolitical turmoil, supply chain disruption and the growing impact of climate hazards. In response, investors, lenders and insurers are increasingly looking for more in-depth and actionable analysis of the physical risk held in the footprint of a company’s operations and investments. The integration of First Street data into MSCI’s existing geospatial capabilities will enable clients to be better informed about their changing risk exposures and translate that directly into financial decision-making.”
First Street founder and CEO Matthew Eby said, “First Street was built on the simple conviction that every financial decision should account for a changing climate. We built the Climate Risk Financial Modeling (CRFM) category to turn that conviction into reality. Joining MSCI puts our property-level science in front of the world’s leading investors, lenders and insurers and turns climate risk from a disclosure exercise into a daily input for how capital is priced and allocated.”
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