The Price of Not Knowing
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Company disclosures may leave investors with an incomplete picture of physical climate risk. Across 25,346 global companies we analyzed, 81% mentioned physical climate risk in their disclosures, but only 27% detailed how it could affect the business. Recognition also often came late. Among U.S. companies with substantive disclosures, 74% first flagged a material climate shock in an 8-K filing before addressing the risk in detail in an annual 10-K.
MSCI’s first joint research collaboration with First Street combines MSCI Sustainability and Climate data with First Street’s physical-hazard and adaptation modeling to examine that gap.1 The analysis found that 37% of MSCI ACWI Index companies faced higher operational risk yet they had no asset-hardening adaptation. Modeling suggests opportunities remain: 94% had at least one adaptation measure with positive savings on investment under present-day risk conditions, with a median benefit-cost ratio of roughly 5x, rising to 37x over 30 years.
For investors, combining company disclosures with independent assessment can help reveal where physical climate risk may be underrecognized and preparedness may lag.
Data as of June 2026. The chart compares modeled acute physical climate exposure with reported preparedness across MSCI ACWI Index companies. More than a third of companies combine higher modeled exposure to their owned and operated assets with no disclosed adaptation measures involving infrastructure investments for floods, wind or wildfires, highlighting a potential gap between underlying risk and preparedness. Source: MSCI Sustainability and Climate. MSCI Sustainability & Climate products and services are provided by MSCI Solutions LLC in the United States and MSCI Solutions (UK) Limited in the United Kingdom and certain other related entities.
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GeoSpatial Asset Intelligence
GeoSpatial Asset Intelligence delivers asset-level nature and physical risk data to help investors, banks and insurers identify and manage risk.
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1 MSCI acquired First Street in August 2026.
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