Hidden in Plain Sight: Physical Risk in Asset Owners’ Portfolios
Preview
Corporate asset locations are a critical source of financial-risk intelligence for investors. More so when coupled with powerful overlays related to physical climate risk.
MSCI’s new study, conducted in collaboration with Swiss Re Risk Data Solutions, analyzed more than 11,000 companies and 500,000 physical assets underpinning the listed-equity portfolios of 18 leading asset owners, representing USD 4 trillion in AUM.
Key takeaways:
- Potential business-interruption risk is 14 times larger than asset damage risk
- 55% of companies are severely exposed to physical risk hazards today
- 89% of assets face multiple overlapping hazards
- Clear adaptation gap demands investor engagement, only 16% of those exposed firms formally disclose integration of physical risk management
Physical risk exposures are global, regardless of regional investment focus. Hazards such as wildfires, droughts and heat waves often compound and are already affecting portfolio companies worldwide.
Using MSCI GeoSpatial Asset Intelligence and Physical Risk Solutions, asset owners can pinpoint areas of risk and opportunity, engage on adaptation and turn climate-risk insights into a foundation for more resilient long-term portfolios.
Data as of Sept. 29, 2025. Asset locations can be significantly exposed to multiple hazards. The map shows all asset locations of the combined asset-owner portfolio. Asset locations are colored by the number of hazards with an intensity value of 8/10 or higher. Asset locations that have an intensity value of 8/10 or higher for high-impact hazards: water scarcity, heat waves and fluvial flood, are highlighted as red dots. Source: MSCI Sustainability & Climate Research Services
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Physical Risk: The New Frontier
Financial crises come and go. Physical risks — climate, geopolitics, demographics — are unprecedented and alter the world for decades. It’s time investors confront these realities reshaping our world.
GeoSpatial Asset Intelligence
GeoSpatial Asset Intelligence delivers asset-level nature and physical risk data to help investors, banks and insurers identify and manage risk.
Physical Risk Solutions
Analytical tools and data from MSCI designed to support investors and banks in assessing and managing physical risk.
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