MSCI Acquires First Street to Enhance Physical Climate Risk Capabilities for Financial Decision Making

Key Terms

physics-based climate risk data technical

Data produced by scientific climate models and observations that estimate how physical forces like heat, storms, sea level rise, drought and flooding will affect specific locations, assets or supply chains over time. For investors it acts like a long-range weather forecast for money: it helps quantify potential damage or disruptions, guide where to buy or sell, set aside reserves, price insurance and test portfolios against future climate-driven losses.

geospatial solutions technical

Geospatial solutions are tools and services that gather, map and analyze location-based data from sources like satellites, sensors and mobile devices to show where things are and how they move. For investors, they matter because they turn raw location information into actionable insights—helping companies choose sites, optimize delivery routes, assess physical risks or target customers—much like using a smart GPS and live traffic to make better, faster business decisions.

multi-hazard models technical

Multi-hazard models are analytical tools that estimate the likelihood and combined impact of multiple threats—such as storms, floods, earthquakes, fires or industrial accidents—happening alone or interacting at the same time. Like a weather map that shows overlapping storms and wind alerts, these models help investors see how several risks could hit an asset, supply chain or portfolio at once, informing valuation, insurance needs and decisions about where to put capital.

ai-enabled workflow technical

An ai-enabled workflow is a business process where artificial intelligence tools help perform, guide, or automate steps that people used to do manually, such as sorting data, spotting patterns, drafting text, or routing tasks. For investors, it matters because these workflows can lower costs, speed up delivery, reduce mistakes and create new revenue opportunities—similar to how a GPS makes driving faster and less error-prone—affecting a company’s productivity, margins and competitive edge.

transition finance financial

Transition finance is funding, loans and investment tools that help companies shift from high-pollution or carbon-intensive operations toward cleaner, lower-carbon business practices. Investors use it to support and evaluate a company's plan to reduce climate-related risks and comply with future rules; think of it as providing a bridge loan and a roadmap so a business can change course without collapsing, which can protect returns and lower long-term risk.

climate risk financial modeling (crfm) financial

Climate risk financial modeling (CRFM) uses data, scenarios and math to estimate how climate change and policies to address it could affect a company’s or portfolio’s cash flows, costs and asset values. It converts physical threats (like extreme weather) and transition changes (like new regulations or shifting demand) into projected financial outcomes, giving investors a “weather forecast” for money to anticipate losses, spot opportunities and compare how resilient different investments are.

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NEW YORK--(BUSINESS WIRE)-- MSCI Inc. (NYSE: MSCI) is enhancing its global physical climate risk capabilities with the acquisition of First Street, a leading provider of physics-based climate risk data and analytics for every property in the world.

Investors, financial institutions and companies are demanding physical climate risk insights embedded directly into investment and risk workflows to inform critical financial decision making, as climate-related physical risks accelerate globally. First Street’s own research shows that companies have become more than 6.5 times as likely to issue profit warnings following extreme weather events in the past two decades.ⁱ

The integration of First Street’s data and tools into MSCI’s extensive climate and geospatial solutions will enable quantified assessments of financially relevant physical climate risk at any geographic coordinate and across more than 2 billion structures worldwide.ⁱⁱ

These additional capabilities can help institutions meet rising regulatory and reporting requirements while supporting physical risk management and adaptation and resilience planning.

First Street provides multi-hazard models that incorporate climate signals and are validated against observed events to assess current and future physical risk exposure, asset damage and business interruption.

Powered by proprietary data on building characteristics, infrastructure dependencies and site-level adaptation, these models translate physical hazards into measurable financial impact estimates. The interactive platform delivers these insights through visualizations and on-demand, customizable analytics for individual properties, companies and portfolios within one unified AI-enabled workflow.

As extreme weather and geopolitical disruption are making asset location a critical factor in evaluating investment risk and opportunity, the ability of banks, insurance companies, asset managers, asset owners and companies to analyze and act upon location-based risks could be a key determinant of future success. This trend is reflected in major European central banks’ use of MSCI data to enable them to better identify climate risks across their loan books.

The acquisition further strengthens MSCI’s long-established leadership in climate investment tools and research, building on decades of expertise in geospatial intelligence, climate scenario analysis and transition finance to deliver greater transparency, innovation and scalability.

Richard Mattison, Head of Sustainability and Climate at MSCI, 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.”

Matthew Eby, Founder and CEO at First Street, 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.”

The transaction consideration includes a cash payment of $120 million at closing (subject to customary closing adjustments), with the potential for additional cash payments during the first two years following closing if certain revenue thresholds are achieved. The transaction is expected to close in the third quarter of 2026, subject to regulatory approvals and customary closing conditions. Following closing, First Street's financial results will be reported within MSCI's Sustainability and Climate segment.

About MSCI

MSCI Inc. (NYSE: MSCI) strengthens global markets by connecting participants across the financial ecosystem with a common language. Our research-based data, analytics and indexes, supported by advanced technology, set standards for global investors and help our clients understand risks and opportunities so they can make better decisions and unlock innovation. We serve asset managers and owners, private-market sponsors and investors, hedge funds, wealth managers, banks, insurers and corporates. To learn more, please visit www.msci.com. #IR

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or performance and involve risks that may cause actual results or performance to differ materially, and you should not place undue reliance on them. Risks that could affect results or performance are in MSCI’s Annual Report on Form 10-K for the most recent fiscal year ended on December 31 that is filed with the SEC. MSCI does not undertake to update any forward-looking statements. No information herein constitutes investment advice or should be relied on as such. MSCI grants no right or license to use its products or services without an appropriate license. MSCI MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE WITH RESPECT TO THE INFORMATION HEREIN AND DISCLAIMS ALL LIABILITY TO THE MAXIMUM EXTENT PERMITTED BY LAW.

ⁱ The New Cost of Doing Business, 16 Risk Assessment, by First Street, March 2026.
ⁱⁱ Since September 2025.

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Source: MSCI Inc.