MSCI Inc. (MSCI): PESTLE Analysis [Nov-2025 Updated]

MSCI Inc. is the engine room for trillions in passive capital, but in late 2025, the macro forces are defintely shifting the ground beneath its feet. Your investment thesis needs to account for two critical trends: the geopolitical risk of fragmented markets and the massive opportunity in leveraging AI to deliver custom, high-margin data, especially with estimated 2025 recurring revenue hitting around $2.4 billion. We're breaking down the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) factors so you can see the clear actions to take now.

MSCI Inc. (MSCI) - PESTLE Analysis: Political factors

Increased regulatory scrutiny on index providers globally

You need to understand that index providers, which were once seen as quiet utilities, are now squarely in the crosshairs of global regulators. This is a direct risk to MSCI Inc.'s core business model, which saw Index segment operating revenues hit $451.2 million in Q3 2025. The most immediate, concrete example is the ongoing consultation over the classification of Digital Asset Treasury (DAT) companies, like Strategy (formerly MicroStrategy).

MSCI is evaluating a proposal to exclude companies whose primary business is holding crypto assets. The final decision, expected in early 2026, could trigger forced selling from passive funds ranging from $2.8 billion to $8.8 billion. This regulatory action is a clear signal that index methodologies are no longer just a technical matter; they are a political and systemic risk issue. For Strategy, the stock had already fallen 40.9% year-to-date in 2025, showing the market's reaction to this uncertainty. The scale of the risk is huge when you consider that notional ETF assets linked to MSCI indexes reached $2.02 trillion by the end of Q2 2025. That's a lot of money tied to one firm's classification decisions.

Geopolitical fragmentation impacting index inclusion/exclusion decisions

The acute divergence between major economic blocs, particularly the US and others, is forcing a strategic realignment in global finance. Geopolitical fragmentation is no longer a slow-moving trend; it's a fast-moving risk that directly influences which stocks can be included in a global benchmark.

MSCI's own 2025 Global Market Accessibility Review, based on data as of May 31, 2025, continuously assesses the 'Stability of the Institutional Framework' for all 87 markets it covers. This review is essentially a political risk audit, looking at government interventions and foreign investment restrictions. When a market's stability score deteriorates, like with Russia's near-total pivot away from Western finance following the 2022 invasion of Ukraine, it forces a re-evaluation and potential exclusion, which then impacts billions in passive capital.

US-China trade tensions driving demand for ex-China investment products

The US-China trade conflict has escalated sharply in 2025, creating a clear market demand for investment products that mitigate this sovereign risk. In October 2025, the US announced a 100% tariff on certain Chinese imports, with China retaliating with 84% tariffs on US exports. This tit-for-tat has destabilized global supply chains and forced investors to prioritize 'de-risking' strategies.

This volatility is creating a massive opportunity for MSCI to develop and license 'ex-China' or 'China-A-share-only' indexes, which help investors with geographic diversification. The trade war has exposed stark sectoral weaknesses in emerging markets, with basic materials, consumer discretionary, and financials seeing average equity price declines of 7-9% following the April 2025 tariff announcement. Investors are actively seeking indices that track markets like Vietnam, India, and Mexico, which are benefiting from redirected trade flows, a trend that directly boosts MSCI's Index licensing revenue. You should be looking at the growth in AUM for these specific regional or single-country ETFs.

New EU financial regulations (e.g., MiFID II revisions) affecting data pricing

The European Union's Markets in Financial Instruments Directive II (MiFID II) review is a headwind for MSCI's data business. The transposition deadline for the MiFID II amendments is September 29, 2025, with key changes already coming into effect.

The primary concern is the push for a Consolidated Tape (CT)-a single, centralized source for market data across the EU. This initiative is explicitly designed to enhance transparency and, critically, to reduce the cost of market data, which is a key revenue stream for index and data providers. The new Single Volume Cap (SVC) of 7% on trading without pre-trade transparency, effective October 2025, also changes market structure. The creation of a Designated Publishing Entity (DPE) regime, which became fully operational in February 2025, further centralizes data reporting. This regulatory pressure could compress the high margins in MSCI's Index and Analytics segments over the long term, so defintely watch the revenue distribution scheme for the EU equity CT.

EU Regulatory Change (MiFID II/MiFIR)	Application Date (2025)	Direct Impact on MSCI Business
MiFID II Amendments Transposition Deadline	September 29, 2025	Requires financial institutions (MSCI clients) to adapt to updated data reporting and pricing structures.
Designated Publishing Entity (DPE) Regime Fully Operational	February 3, 2025	Centralizes data reporting, increasing regulatory oversight on data sources.
Single Volume Cap (SVC) Replaces Double Volume Cap (DVC)	October 2025	Changes trading venue transparency rules, potentially altering client trading behavior and data needs.
Consolidated Tape (CT) Development	Ongoing (RTS submitted Dec 2024)	Aims to reduce the cost of market data, posing a long-term threat to the Index segment's pricing power (Q3 2025 Index revenue: $451.2 million).

MSCI Inc. (MSCI) - PESTLE Analysis: Economic factors

Continued shift to passive investing, boosting demand for core indexes.

The secular shift toward passive investing remains the single most powerful economic tailwind for MSCI's core Index segment. This trend directly translates into higher asset-based fees (ABFs) as more capital flows into Exchange Traded Funds (ETFs) and non-ETF indexed funds that track MSCI's benchmarks. The sheer scale is staggering: as of the third quarter of 2025, the combined Assets Under Management (AUM) in ETF and non-ETF products linked to MSCI's indexes reached a record high of about $6.4 trillion. This enormous AUM base drove a robust 17.1% increase in asset-based fees for the Index segment in Q3 2025. This is the economic engine of the company, and it's running hot. The Index segment remains the largest revenue contributor, generating $451.2 million in operating revenues in Q3 2025 alone.

Here's the quick math on the Index segment's Q3 2025 performance:

• Index Operating Revenues: $451.2 million
• Year-over-Year Growth: 11.4%
• Asset-Based Fee Growth: 17.1%

Global interest rate volatility impacting Analytics segment budget cycles.

While the Index business thrives on market AUM, the Analytics segment, which provides risk and performance tools, is more sensitive to the budgeting and spending cycles of financial institutions. The elevated global interest rate volatility and general economic caution in 2025 have led to a moderating pace of new business in certain subscription products, which is a key risk. This caution can cause clients to delay or reduce spending on new risk management software and data subscriptions, impacting net new sales. The Analytics segment's organic operating revenue growth was a more modest 5.6% in Q3 2025, lagging the Index segment's growth. To be fair, the Analytics Run Rate still reached $742.4 million as of September 30, 2025, showing the underlying stability of the existing client base. Still, new recurring subscription sales have slowed in some areas, which is defintely something to watch.

Strong recurring subscription revenue model provides stability; Estimated 2025 Recurring Revenue is approximately $2.4 billion.

MSCI's business model is fundamentally resilient because it is built on recurring revenues, which are less volatile than transactional fees. The retention rate-a measure of client stickiness-was strong at 94.7% in Q3 2025. This high retention rate and the subscription-based structure provide excellent visibility into future cash flows, a major advantage in an uncertain economic environment. The annualized value of all recurring revenues, known as the Total Run Rate, stood at a robust $3.19 billion as of September 30, 2025. For context, the actual operating revenues for the first nine months of 2025 were $2,311.9 million. This revenue stability supports the company's premium valuation.

The table below breaks down the key financial metrics that demonstrate this stability for the first nine months of 2025:

Metric (9 Months Ended Sep 30, 2025)	Value (in millions)	Year-over-Year Change
Operating Revenues	$2,311.9	9.4%
Adjusted EBITDA	$1,394.5	10.3%
Total Run Rate (as of Sep 30, 2025)	$3,186.5	10.1%

Inflationary pressures increasing operating costs, especially for talent acquisition.

The flip side of economic growth is inflation, and for a data and technology firm like MSCI, the primary inflationary pressure is on talent acquisition and retention. The war for top-tier financial technology and data science talent is fierce, driving up compensation and benefits costs. In Q3 2025, total operating expenses rose by 6.9% to $345.7 million. This increase was explicitly attributed, in part, to higher compensation and benefits costs resulting from increased headcount. Management's guidance for full-year 2025 operating expenses is projected to be between $1.41 billion and $1.45 billion. What this estimate hides is the persistent pressure to raise salaries to maintain a competitive edge, which could erode margin if revenue growth decelerates. They are paying up for the best people.

MSCI Inc. (MSCI) - PESTLE Analysis: Social factors

Growing investor demand for transparency in Environmental, Social, and Governance (ESG) factors

You are seeing a massive, irreversible shift in what investors actually want to see in a portfolio. It's not just about returns anymore; it's about transparency in Environmental, Social, and Governance (ESG) factors. For MSCI, this is a core business driver, not a side project. The global ESG investing market is projected to reach a staggering $50 trillion by the end of 2025, which tells you everything you need to know about the demand signal.

The company is directly benefiting from this need for clarity. In the first half of 2025, the Sustainability and Climate segment's recurring subscription Run Rate-which is the forward-looking annualized revenue base-hit $370.8 million as of September 30, 2025, a growth of 7.8%. That's a strong, sticky revenue stream built on providing the exact data the market is clamoring for. Honestly, the biggest risk here is if they can't keep up with the pace of regulatory change and client needs for new metrics.

Here's a quick look at the segment's performance in 2025:

Metric	Value (Q2 2025)	Year-over-Year Growth	Run Rate (Q3 2025)
Sustainability & Climate Operating Revenue	$88.9 million	11.3%	N/A
Climate Solutions Revenue Growth	N/A	20%	N/A
Sustainability & Climate Run Rate	N/A	N/A	$370.8 million

Talent wars for data science and AI expertise in major financial hubs

The competition for top-tier data science and Artificial Intelligence (AI) talent in financial hubs like New York and London is defintely a headwind. MSCI is a data and analytics company, so this talent is their lifeblood. They can't afford to lose the war for people who can build the next generation of climate risk models or index algorithms.

Instead of just hiking salaries, the company is focusing on internal development and culture. They've established an internal AI learning hub, where employees explored over 25,000 AI learning materials in a recent 10-month period. Plus, they have over 350 AI Champions leading the transformation across the firm. This strategy of 'grow your own' AI talent is smart, turning a cost center into a competitive advantage.

Their overall headcount as of September 30, 2025, was 6,253 employees, a modest 2.2% increase, suggesting a focus on quality and upskilling rather than just mass hiring. They're using AI to unify fragmented systems, but the human expertise is still the core differentiator.

Institutional shift toward net-zero and climate-focused investment mandates

The institutional world-pension funds, endowments, and sovereign wealth funds-is moving aggressively toward net-zero commitments, and they need MSCI's tools to get there. This isn't theoretical; it's driving massive, concrete deals. For example, in Q2 2025, MSCI secured a major $25 billion European pension fund mandate that is benchmarked to one of its climate indexes. They also landed a significant $5-$10 billion deal with a U.S. annuity provider. These are clear examples of institutional money following a climate mandate.

MSCI is also putting its own house in order, which builds credibility with clients. They are committed to reaching net-zero by 2040, and their 2025 operational milestones are tough:

• Source 100% renewable electricity.
• Reduce absolute Scope 1 and 2 CO2e emissions by 60% (from a 2019 base year).
• Increase suppliers with science-based targets to 60% by spend.

This internal commitment reinforces their position as a trusted partner in the net-zero transition, especially as the share of listed companies with a climate target validated by the Science Based Target initiative (SBTi) rose to 18.5% as of June 30, 2025. They're both tracking the trend and participating in it.

Increased focus on diversity and inclusion metrics in corporate governance

Corporate governance is no longer just about shareholder rights; it's about social legitimacy, and Diversity and Inclusion (D&I) metrics are central to that. Investors are demanding better representation because the data shows it works: companies globally with a critical mass of women (30% or more) on their board achieved a cumulative return nearly 19% higher over the five years ending September 30, 2024, compared to those without.

MSCI, as the data provider, is highly exposed to this social pressure. They track that women held 27.3% of board seats at publicly listed large- and mid-cap companies globally in 2024. Internally, they have a Chief Responsibility and Diversity Officer and use practices like submitting blind resumes to hiring managers to remove bias.

A key operational factor is their global talent distribution, which points to a diverse workforce base:

• Employees in emerging market locations: 70%
• Employees in developed market locations: 30%

This global footprint, with 70% of their 6,253 employees in emerging markets as of Q3 2025, is a strategic advantage for diversity of thought, but it also means managing a complex, multi-jurisdictional D&I strategy.

MSCI Inc. (MSCI) - PESTLE Analysis: Technological factors

Artificial intelligence (AI) and machine learning (ML) integration for faster index construction and custom analytics

You can't talk about a data and analytics business in 2025 without starting with Artificial Intelligence (AI) and Machine Learning (ML). MSCI is defintely not sitting still here; they are using generative AI (GenAI) to fundamentally change their operating model and product suite. The immediate payoff is in efficiency: through AI implementation, the company has managed to double data production throughput while simultaneously reducing costs by 25%.

This isn't just a back-office optimization. They are pushing AI right into the client experience with tools like AI Insights, which is now multi-asset class. This solution lets clients use natural language to ask complex questions about their portfolios, moving beyond rigid, pre-set reports. Also, AI is accelerating their internal product development, achieving 50%-60% time efficiency gains in areas like coding and testing, which means new tools hit your desk much faster.

• Double data throughput with AI.
• Cut data production costs by 25%.
• AI Insights enables natural language portfolio queries.
• Accelerate product development by 50% to 60%.

Competition from open-source data providers and blockchain-based data solutions

The core threat to a proprietary data giant like MSCI isn't just another big vendor; it's the rise of decentralized, open-source data and the transparency promised by blockchain. While open-source software (OSS) is accelerating globally, the most immediate, concrete risk is coming from the digital asset space.

MSCI is currently consulting on a proposal to exclude companies whose digital asset holdings represent 50% or more of their total assets from its Global Investable Market Indexes. If this exclusion happens and other index providers follow suit, it could trigger significant market shifts, potentially leading to outflows of up to $8.8 billion from passive index vehicles linked to major benchmarks. This shows the technology-driven tension between traditional financial infrastructure and the new, decentralized asset class.

Cloud migration and data infrastructure scaling to handle massive data volume growth

Handling trillions in assets and processing over 7.1 billion positions in analytics in a single day is a massive infrastructure challenge. MSCI's strategic answer is cloud migration, a necessity for the kind of scaling they need. They've partnered with hyperscalers like Microsoft and Google to build out their cloud adoption and data distribution capabilities.

The investment is ongoing, reflected in their Q1 2025 total operating expenses of $368.8 million, which saw an increase driven partly by higher information technology costs. They are treating this as a capital allocation decision, assessing all cloud and AI modernization investments based on a clear return on investment (ROI). The goal is simple: be able to scale instantly without the old-school data center constraints. The overall public cloud services spending worldwide is forecast to reach $723.4 billion in 2025, so this is a macro trend they must ride.

Developing next-generation tools for private asset valuation and risk modeling

The private assets market is booming, and investors are desperate for public-market levels of transparency-that's the opportunity. MSCI is addressing this with next-generation tools. The launch of the Private Credit Factor Model in 2025 is a prime example, allowing investors to stress test exposures and break down risks in a notoriously opaque asset class.

This focus is a clear growth driver. The Private Assets Run Rate was already $273.5 million as of March 31, 2025, showing organic growth of 7.5%. In Q2 2025, the recurring net new sales for private capital solutions grew by 24%, now making up over 15% of total recurring revenue. They are also leveraging partnerships, such as the one with Moody's Corporation in April 2025, to combine Moody's EDF-X credit risk models with MSCI's data on over 2,800 private credit funds and 14,000+ underlying companies for independent risk assessments.

MSCI Private Asset Solutions Growth (Q2 2025 Focus)

Metric	Value/Amount (2025)	Significance
Private Assets Run Rate (Mar 31, 2025)	$273.5 million	Represents a significant, growing revenue stream.
Organic Recurring Subscription Run Rate Growth (Private Assets)	7.5%	Solid organic growth in a key strategic segment.
Recurring Net New Sales Growth (Private Capital Solutions, Q2 2025)	24%	Exceptional sales momentum in the private markets space.
Total Private Investments Covered by MSCI Data	$15 trillion+	Scale of data dominance in the private markets.

MSCI Inc. (MSCI) - PESTLE Analysis: Legal factors

Stricter data privacy laws (e.g., CCPA, GDPR) increasing compliance costs.

You're operating a global data business, so the patchwork of international data privacy laws is a constant, expensive headache. The US and EU are leading the charge, directly increasing your cost of doing business. For a large enterprise like MSCI Inc., the initial cost of complying with a major US regulation like the California Consumer Privacy Act (CCPA) was estimated to be up to $2,000,000, and that's just the start for one state.

The real risk is in recurring costs and penalties. The Connecticut Data Privacy Act (CTDPA) cure period expired in January 2025, meaning regulators can now impose penalties without prior warning. This is a clear signal: you must be proactive. While MSCI Inc.'s total operating expenses for Full-Year 2025 are projected to be between $1,415 million and $1,445 million, a portion of this is defintely consumed by the legal and technical staff needed to maintain global compliance.

The enforcement is real; for instance, a 2025 settlement in California under the CCPA reached $1.55 million for a single company's privacy violations. This pressure is compounded by the fact that MSCI Inc. has a global workforce of 6,253 employees as of September 30, 2025, with 70% located in emerging markets, requiring complex, multi-jurisdictional compliance frameworks.

Intellectual property (IP) protection challenges for proprietary index methodologies.

MSCI Inc.'s core value is its proprietary intellectual property (IP)-the complex, non-obvious methodologies used to construct indices like the MSCI ACWI Index. Protecting this IP is mission-critical because a competitor could try to replicate your index's performance without paying the license fee. The company explicitly states in its November 2025 Index Review announcements that its IP rights prohibit the use of an MSCI index-linked future or ETF in a competing third-party index without a license.

This IP is the moat protecting the Index segment's massive revenue base. The Index segment's Run Rate (annualized recurring revenue) was $1.8 billion as of September 30, 2025, up 12.4% year-over-year. The constant threat of IP misappropriation, especially with the rise of AI-driven index creation tools, means the legal team must be vigilant, constantly monitoring the market for products that are 'too close' to their benchmarks.

Here's the quick math: protecting a $1.8 billion revenue stream justifies a significant legal budget. You can't let a competitor chip away at that with a clever workaround.

Potential antitrust review of index provider market dominance in major jurisdictions.

The index provider market is an oligopoly, and that dominance is attracting regulatory scrutiny, especially in the US and EU. The precedent set by the US Department of Justice's monopolization case against Google's search index in 2024/2025 is a clear warning for any data-dominant 'gatekeeper.' The court's remedy, forcing Google to share its search index data, shows regulators are willing to break up data monopolies to restore competition.

For MSCI Inc., which is a key player in the ETF and institutional investment space, this risk is material. The European Commission is actively enforcing the Digital Markets Act (DMA) in 2025, with potential fines of up to 10% of global annual turnover for gatekeepers found in violation. While MSCI Inc. is not a DMA 'gatekeeper,' the regulatory focus on 'exclusivity' and 'data sharing' in adjacent markets is a direct threat to the current index licensing model. The EC is also finalizing guidelines on exclusionary abuses in 2025, which could make it easier to challenge dominant companies' business practices.

The key risk is a regulatory requirement to license index data at a lower, non-discriminatory price, which would erode the Index segment's high margins.

Complex licensing agreements for data distribution and usage rights.

The entire business model rests on complex licensing agreements. The Index segment alone generated $451.2 million in operating revenues in Q3 2025, largely from recurring subscriptions and asset-based fees tied to these licenses.

These agreements are complex because they must account for:

• Usage rights (e.g., internal risk management vs. creating an external financial product).
• Jurisdictional variations (e.g., MiFID II/MiFIR compliance in the EU).
• Asset-based fees (AUM in ETFs linked to MSCI Inc. indexes reached $2.02 trillion as of Q2 2025, requiring meticulous tracking of client assets).

The intricacy of these contracts leads to non-recurring revenues from 'one-time contract items' and 'overage fees,' which contributed to revenue growth in Q2 2025. This shows that even routine contract management is a constant source of legal friction and revenue generation. The challenge is ensuring these complex agreements are legally sound across dozens of countries while avoiding disputes that could threaten the stable, recurring revenue base that makes the company so valuable.

The table below summarizes the financial scale of the legal and licensing environment as of late 2025:

Legal/Compliance Factor	2025 Financial/Statistical Data (Q3/FY Guidance)	Legal Implication
Total Operating Expense Guidance (FY 2025)	$1,415 million to $1,445 million	Anchor for rising compliance and legal defense costs.
Index Segment Run Rate (Q3 2025)	$1.8 billion (up 12.4% YoY)	Value of proprietary IP and licensing agreements under protection.
AUM in Linked ETFs (Q2 2025)	$2.02 trillion	Scale of asset-based fee licensing, increasing regulatory scrutiny risk.
EU Antitrust Fine Potential (DMA)	Up to 10% of global annual turnover	Maximum penalty risk for market dominance abuse in a key jurisdiction.

MSCI Inc. (MSCI) - PESTLE Analysis: Environmental factors

Explosive growth in demand for Climate and ESG data and rating products

You've seen the headlines about a cooling in the broader Environmental, Social, and Governance (ESG) market, but the demand for hard, quantifiable climate data is still exploding. For MSCI Inc., this is a clear opportunity. The company's newly-renamed Sustainability and Climate segment, which includes these products, reported operating revenue of $88.9 million in Q2 2025, marking an 11.3% increase year-over-year. Even more telling, the dedicated climate solutions within that segment grew by a robust 20% in Q2 2025. This growth, even with some broader ESG headwinds, shows that clients are prioritizing the 'E' in ESG-specifically, the climate-related risk and transition data.

Here's the quick math: the segment's annualized recurring revenue run rate was already at $352.3 million as of March 31, 2025. That stickiness, driven by recurring subscriptions, is what makes their business model so resilient. It's not just about ratings anymore; it's about providing the underlying data for portfolio construction and regulatory compliance.

Metric (Sustainability and Climate Segment)	Q2 2025 Value	Growth Y/Y	Insight
Operating Revenue	$88.9 million	11.3%	Strong overall segment growth despite market noise.
Climate Solutions Growth	N/A (Sub-segment)	20%	Climate-specific products are a key growth accelerator.
Run Rate (as of Mar 31, 2025)	$352.3 million	9.9%	High recurring revenue base signals client reliance.

Mandatory climate-related financial disclosures (TCFD, SEC rules) driving client adoption

The regulatory environment is defintely a tailwind, even if the U.S. picture is messy right now. The global push for standardized disclosure, largely modeled on the Task Force on Climate-related Financial Disclosures (TCFD) framework, forces clients to buy data. While the U.S. Securities and Exchange Commission (SEC) climate disclosure rules, which were slated to begin phase-in for large accelerated filers with fiscal year 2025 data, have faced legal challenges and a pause in defense as of March 2025, the underlying demand for data hasn't disappeared.

Why? Because U.S. companies still need to comply with California's state laws (like SB 253 and SB 261) and, crucially, the European Union's Corporate Sustainability Reporting Directive (CSRD), which requires climate reporting from 2025 onward for many global firms. This patchwork of rules means clients must have auditable, standardized data on:

• Material Scope 1 and 2 Greenhouse Gas (GHG) emissions.
• Climate-related physical and transition risks.
• Processes for climate risk oversight and management.

This regulatory complexity is a direct driver for MSCI's disclosure and risk management tools.

Need to continually update ESG metrics to reflect evolving scientific consensus

The science of climate change isn't static, so our financial models can't be either. MSCI's competitive edge relies on its ability to rapidly integrate the latest scientific consensus-like new Intergovernmental Panel on Climate Change (IPCC) scenarios or updated physical hazard maps-into its ESG metrics and ratings. This is a constant operational challenge and a high barrier to entry for competitors.

The market is shifting from simple exclusionary screening (just avoiding certain stocks) to detailed transition risk analysis (how a company will adapt to a net-zero economy). This requires constantly refining metrics for:

• Net-Zero Alignment: Assessing corporate targets against the Paris Agreement's 1.5°C goal.
• Biodiversity Risk: Expanding beyond carbon to include nature-related financial disclosures.
• Just Transition: Incorporating social impacts of the energy transition.

This need for continuous, granular data refinement ensures a steady demand for MSCI's research and analytics subscriptions.

Physical climate risk modeling becoming a core component of real estate and infrastructure analytics

Physical climate risk is no longer a long-term, theoretical problem; it's a present-day financial risk. More than 80% of companies surveyed by the MSCI Institute reported that extreme weather events have disrupted operations or added to costs in the past five years. This is why physical risk modeling is now a core component of investment due diligence, especially in asset-heavy sectors like real estate and infrastructure.

MSCI's Physical Risk model is a key asset here, assessing the hazard exposure of over 2 million corporate asset locations globally as of March 31, 2025. Three-quarters (76%) of companies report having a framework for managing this risk, showing a clear market need for these tools. The most commonly assessed acute hazards are:

• Severe Storms: 87% of companies assess this risk.
• Flooding: 78% of companies assess this risk.
• Extreme Heat: 67% of companies assess this risk.

This capability helps financial institutions quantify potential damages and loss impacts down to the individual asset location, which is a massive value proposition for portfolio managers and underwriters. Your next step should be to look at your current real estate portfolio and run a physical risk stress test against the latest 2025 climate scenarios.