MSCI has announced the acquisition of climate risk financial modeling company First Street in a deal valued at $120 million, marking a significant move to strengthen its physical climate risk analytics capabilities.
- Growing Demand for Physical Climate Risk Intelligence
- First Street Founder Highlights Climate Risk Integration
- Enhancing MSCI’s Climate and Geospatial Solutions
- Climate Risks Becoming a Financial Priority
- MSCI Sees Climate Data as Critical to Investment Decisions
- Physical Climate Risk Becomes a Core Investment Consideration
- Transaction Expected to Close in 2026
The acquisition comes as investors, financial institutions, insurers, and corporations increasingly seek advanced tools to understand and manage the financial impacts of climate-related risks such as floods, wildfires, extreme heat, and severe weather events.
Under the terms of the agreement, MSCI will pay $120 million in cash at closing, with the potential for additional payments during the first two years following the transaction if specific revenue milestones are achieved.
Growing Demand for Physical Climate Risk Intelligence
Founded in 2016 and headquartered in New York, First Street specializes in climate risk financial modeling and provides property-level climate risk assessments globally.
The company has built a reputation for helping organizations quantify how climate hazards could impact assets, portfolios, and investments by using advanced climate science, engineering models, and physics-based simulations.
Its solutions are widely used by:
- Asset owners and asset managers
- Real estate investors and developers
- Banks and financial institutions
- Insurance companies
- Corporate organizations
First Street’s models evaluate risks associated with:
- Flooding
- Wildfires
- Extreme heat
- Wind-related events
- Climate-driven environmental changes
The platform enables organizations to understand the potential financial consequences of physical climate risks before they materialize.
First Street Founder Highlights Climate Risk Integration
Commenting on the acquisition, Matthew Eby, Founder and CEO of 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 statement reflects the growing shift from climate reporting and disclosure toward integrating climate risk directly into investment and capital allocation decisions.
Enhancing MSCI’s Climate and Geospatial Solutions
MSCI said the acquisition will significantly strengthen its climate analytics platform by integrating First Street’s proprietary data, modeling capabilities, and climate intelligence solutions.
Following the integration, MSCI expects to provide climate risk assessments across:
- More than 2 billion structures worldwide
- Any geographic coordinate globally
- Real estate assets
- Infrastructure investments
- Corporate portfolios
- Financial and lending portfolios
The enhanced capabilities are expected to help organizations improve:
- Climate risk management
- Adaptation planning
- Resilience strategies
- Investment decision-making
- Regulatory compliance
- Sustainability reporting
Climate Risks Becoming a Financial Priority
According to MSCI, the acquisition comes at a time when climate-related physical risks are accelerating globally.
Increasingly frequent extreme weather events, rising temperatures, supply chain disruptions, and geopolitical uncertainties are making location-based risk analysis more important than ever for investors and businesses.
Organizations are now seeking more precise climate intelligence to evaluate long-term risks and identify opportunities to improve resilience.
MSCI Sees Climate Data as Critical to Investment Decisions
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. 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.”
The acquisition aligns with a broader trend in sustainable finance, where investors increasingly demand actionable climate intelligence rather than static environmental disclosures.
Physical Climate Risk Becomes a Core Investment Consideration
As climate change continues to influence asset valuations, infrastructure planning, insurance pricing, and lending decisions, physical climate risk assessment is becoming a critical component of financial analysis.
The integration of First Street’s climate science and property-level risk data into MSCI’s investment and sustainability solutions is expected to provide institutions with deeper insights into future climate-related vulnerabilities.
This will allow organizations to better assess risks, allocate capital more effectively, and develop strategies to enhance resilience against climate-related disruptions.
Transaction Expected to Close in 2026
The acquisition is expected to close during the third quarter of 2026, subject to regulatory approvals and customary closing conditions.
Once completed, the transaction will further strengthen MSCI’s position in the growing climate analytics and sustainable finance market while expanding its ability to support investors and institutions navigating an increasingly climate-sensitive global economy.
