Although demand for sustainability and climate analytics is no longer rising in a straight line following pushback from the Trump administration in the U.S., measuring and modeling physical risk exposure and leveraging geospatial analytics — is accelerating, says Andrew Wiechmann, CFO at MSCI.
While broader ESG and sustainability spending has cooled in parts of the U.S., Wiechmann said clients are reallocating budgets toward tools that quantify physical exposure and portfolio risk, rather than headline scores or policy frameworks.
The result is a more selective buying environment where asset owners, insurers and allocators prioritize models that directly inform capital allocation and loss sensitivity.
“You definitely see pockets, particularly in the Americas, where demand for sustainability solutions and insights is more muted,” Wiechmann told investors at the UBS Financial Services Conference on Monday.
He added that clients are “more cautious about additional purchases,” but that softness hasn’t translated into broad retrenchment. Instead, growth is concentrating around hazard and exposure analytics.
“We are seeing areas like our physical risk insights, our geospatial AI-enabled insights — a high-growth area,” he said.
Physical risk modeling depends on asset-level location data and geospatial intelligence that can be aggregated across holdings — capabilities Wiechmann says are becoming foundational to investment workflows.
He described its “asset location, geospatial dataset” as “a key input into assessing the physical risk of a portfolio,” underscoring how exposure mapping has moved from sustainability reporting into core risk measurement.
Artificial intelligence is helping accelerate that build-out. MSCI’s CFO said AI is lowering the cost of cleaning and standardizing hard-to-source data while enabling faster coverage expansion across private and less transparent markets.
Those efficiencies “not only lead to efficiencies for us, but it allows us to rapidly expand the coverage that we have,” Wiechmann added, calling AI “a huge enabler” for new analytics capabilities.
For institutional buyers, the pitch is integration rather than standalone climate tools. MSCI positions physical risk as part of its broader risk and analytics stack (sitting alongside factor models, multi-asset analytics and private markets data), which increases stickiness in constrained budget environments.
Even where demand is cautious, Wiechmann said the firm is winning share as clients consolidate vendors.
“Even against that backdrop… we are picking up market share,” he said, as organizations “look to consolidate providers” across climate and sustainability capabilities.
The implications extend beyond MSCI’s sustainability unit.
Wiechmann described the index platform itself as the firm’s “intellectual infrastructure,” the framework investors use to segment markets, measure risk and construct portfolios. As allocators push for more systematic, outcome-driven mandates — limiting geographic exposure, tilting factors, or incorporating climate and hazard constraints — those preferences increasingly flow through MSCI’s benchmarks and custom indexes.
“We are the standard in common language that is used by investors to navigate the markets…,” Wiechmann said. “They track the performance of those allocations. They measure their risk and then ultimately, they design strategies and portfolios to achieve their specific objectives.”
