Investment data and research provider MSCI announced on Wednesday the acquisition of climate risk financial modelling provider First Street, with the transaction aimed at enhancing MSCI’s global physical climate risk capabilities.

Under the terms of the transaction, MSCI will pay $120 million in cash for First Street upon closing, with the potential for additional cash payments during the first two years following closing if certain revenue thresholds are achieved.

Founded in 2016, New York-based First Street provides solutions to calculate physical climate risk for every property globally, using advanced climate science and engineering approaches. The company offers solutions for asset owners and managers, real estate investors and developers, banks and companies to quantify how hazards such as floods, wildfires, wind, and extreme heat could impact assets and portfolios, using physics-based deterministic models to predict how actual events would transpire.

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.”

According to MSCI, the acquisition comes as climate-related physical risks accelerate globally, with financial institutions and companies increasingly seeking to embed physical climate risk insights into financial decision making.

MSCI said that the integration of First Street’s data and tools into its own 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, enabling the company to support institutions in physical risk management and adaptation and resilience planning, as well as in meeting rising regulatory and reporting requirements.

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 transaction is expected to close in the third quarter of 2026, subject to regulatory approvals and customary closing conditions.