Financial analytics giant MSCI Inc. has agreed a definitive deal to acquire First Street, a leading provider of physics-based climate risk data, in a transaction valued at an initial $120 million (£95 million) in cash.
The acquisition, expected to close in the third quarter of 2026 subject to regulatory approval, significantly enhances MSCI’s global physical climate risk capabilities at a time when extreme weather events increasingly threaten corporate balance sheets.
Under the terms of the agreement, the transaction includes the initial cash consideration alongside potential further cash payments during the first two years post-closing, contingent on First Street meeting specific revenue thresholds. Following the completion of the deal, First Street’s financial results will be integrated into MSCI’s Sustainability and Climate reporting segment.
The move comes as financial institutions face mounting pressure to embed precise environmental risk metrics directly into investment workflows. Recent research by First Street highlights the commercial urgency of the integration, revealing that companies have become more than six and a half times more likely to issue profit warnings following extreme weather events over the last two decades.
By merging First Street’s granular data with MSCI’s existing climate and geospatial solutions, the combined platform will offer quantified assessments of financially relevant physical climate risk at any geographic coordinate, covering more than two billion structures worldwide.
First Street’s multi-hazard models translate physical threats — validated against observed historical events — into measurable financial impact estimates, including asset damage and business interruption. The system utilizes proprietary data on building characteristics and site-level adaptation, delivered via an AI-enabled workflow.
Major European central banks already leverage MSCI data to identify climate exposure across loan books. This acquisition aims to deepen those capabilities, allowing asset managers, insurers, and lenders to navigate accelerating regulatory reporting requirements and refine resilience planning.
Richard Mattison, Head of Sustainability and Climate at MSCI, noted that the financial consequences of asset location have come into sharp focus due to supply chain disruption and climate hazards, driving a demand for actionable footprint analysis.
Matthew Eby, Founder and Chief Executive of First Street, added that the partnership would scale property-level science for the world’s leading capital allocators, moving climate risk from a simple disclosure exercise into a daily pricing input.
