• MSCI will acquire First Street for $120 million upfront, with possible additional payments tied to revenue targets.
• The deal expands MSCI’s physical climate risk analytics across more than 2 billion structures worldwide.
• The acquisition comes as investors, banks, insurers and companies face rising regulatory pressure to quantify location-based climate risks.

MSCI Moves Deeper Into Physical Climate Risk

MSCI is buying First Street in a $120 million deal that will expand its physical climate risk analytics at a time when extreme weather is reshaping financial risk.

The acquisition will add First Street’s physics-based climate data and property-level analytics to MSCI’s climate and geospatial platforms. The companies said the combined offering will support risk assessments at any geographic coordinate and across more than 2 billion structures worldwide.

For investors, banks, insurers and corporate risk teams, the deal reflects a sharp shift in climate analysis. Physical climate risk is moving from sustainability reporting into core financial decision-making. Location now matters more to credit risk, insurance pricing, asset valuation and business continuity planning.

First Street’s research shows that companies have become more than 6.5 times as likely to issue profit warnings after extreme weather events over the past two decades. That finding gives financial institutions a clearer reason to treat climate hazards as balance sheet risks, not only environmental concerns.

From Climate Disclosure to Capital Allocation

First Street provides multi-hazard models that assess present and future physical risk exposure. Its models include climate signals and are validated against observed events. They estimate asset damage, business interruption and financial impact.

The platform draws on proprietary data covering building characteristics, infrastructure dependencies and site-level adaptation. It then translates hazards into measurable financial estimates. Users can access insights through visualizations and customizable analytics for individual properties, companies and portfolios.

MSCI said the integration will help clients meet rising regulatory and reporting demands. It will also support physical risk management, adaptation planning and resilience strategies.

That matters as supervisors and central banks increasingly test financial systems against climate shocks. MSCI said major European central banks already use its data to better identify climate risks across loan books. The First Street acquisition extends that capability into deeper property-level analysis.

As climate rules evolve, executives and investors need tools that connect exposure to financial outcomes. Flood, fire, heat and storm risk can affect collateral values, supply chains, operating costs and insurance availability. For capital allocators, those risks now influence both downside protection and long-term opportunity.

Extreme Weather Puts Asset Location Under Scrutiny

The deal also reflects a wider reassessment of asset location. Extreme weather, supply chain disruption and geopolitical instability have made geography a larger factor in investment risk.

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.”

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MSCI said the acquisition builds on its existing work in climate investment tools, geospatial intelligence, climate scenario analysis and transition finance. The group has expanded its Sustainability and Climate business as asset owners and regulators demand more decision-useful data.

First Street Brings Property-Level Climate Science

First Street has built its position around property-level climate risk analytics. Its models aim to quantify risk across individual assets and portfolios, using science-based projections and observed event data.

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.”

For C-suite leaders, the message is direct. Climate risk data is becoming part of enterprise risk management, capital planning and investor communication. Companies with assets in high-risk locations may face higher financing costs, insurance pressure and greater scrutiny from lenders.

For investors, the acquisition points to a more granular era of climate due diligence. Portfolio exposure can no longer rely only on sector averages or national-level assumptions. Asset-level data gives managers a sharper view of where climate risk is concentrated.

Deal Expected to Close in Third Quarter

The transaction includes a $120 million cash payment at closing, subject to customary adjustments. MSCI may make additional cash payments during the first two years after closing if First Street reaches certain revenue thresholds.

The deal is expected to close in the third quarter of 2026. It remains subject to regulatory approvals and customary closing conditions.

After closing, First Street’s financial results will be reported within MSCI’s Sustainability and Climate segment.

The acquisition places physical climate risk more firmly inside financial infrastructure. For global markets, that shift is significant. As climate hazards intensify, investors and lenders will need clearer data on where assets sit, how exposed they are and what those risks mean for capital allocation.

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