Climate risk service of the year: First Street

As physical climate risks become increasingly material to financial performance, First Street is helping institutions translate climate science into asset-level intelligence that supports investment, lending and risk decisions

Physical climate risk is rapidly moving from the margins of sustainability reporting to the centre of financial decision-making. Banks, insurers, asset managers and pension funds must increasingly understand not only where climate hazards exist today, but how they impact asset values, lending decisions and portfolio resilience over the coming decades.

This shift reflects a broader change in market priorities. Institutions are no longer asking whether physical climate risk matters. They are seeking robust, defensible ways to quantify that risk and integrate it into existing investment, credit and risk management processes.

First Street’s response to these market dynamics helped secure the firm’s recognition as Climate risk service of the year in the Risk Technology Awards 2026.

Our clients have moved physical risk from a disclosure exercise to a capital decision

Jeremy Porter

As climate-related losses continue to mount and regulatory scrutiny intensifies, demand is growing for tools that translate complex climate science into financial metrics that investment committees, risk managers and boards can act upon.

“Our clients have moved physical risk from a disclosure exercise to a capital decision,” says Jeremy Porter, chief economist at First Street. “They need three things the market has struggled to deliver: asset-level data they can trust and translate into a financial number, a view of risk that extends past the asset line to supply chain dependencies and insurance availability, and a way to act on it rather than simply report it.”

First Street’s Enterprise Suite combines transparent, peer-reviewed methodology to support scenario analysis across asset types, and pairs physical exposure with insurance and indirect risk signals. This is quantified through an adaptation module to help risk and credit teams move from exposure to decision, Porter says.

Climate analytics is no longer merely a standalone environmental, social and governance exercise. First Street’s methodology enables organisations to evaluate physical exposure across companies, infrastructure assets and supply chains while assessing how adaptation measures could reduce financial losses.

The platform delivers property-level assessments across billions of properties worldwide, modelling hazards – including flood, wildfire, extreme heat and wind – before translating projected impacts into financial loss estimates that support due diligence, portfolio management, lending and regulatory reporting.

Enterprise Suite’s emphasis on scientific transparency is a key differentiator. Whereas many incumbent tools rely on correlation-based or licensed models the user cannot inspect, First Street builds its own physics-based stack, fully inspectable end to end, and projects risk forwards under climate scenarios rather than extrapolating from historical loss. Those models are validated against observed events before being translated into financial metrics.

“Think of us as sitting where peer-reviewed climate science meets financial strategy,” says Tim Barlow, head of Emea and Apac at First Street. “We build the full climate stack in-house.” These models are grounded in established hydraulic and physical-science methods, and validated against real-world events globally. These run from the macro to the micro, from market and climate scenarios down to the individual asset, and are then translated into the financial metrics that inform a capital decision.

“Owning that entire stack, with scientific rigour on one side and decision-useful answers on the other, is what still differentiates us,” Barlow highlights.

The platform has already expanded well beyond real estate in a short span of 12 months. It can now assess infrastructure assets, such as transport networks, ports, industrial facilities and utilities, while its Company Module enables institutions to evaluate climate exposure across owned assets, operations and supply chains. The Geostrategy Module combines climate hazards with insurance and macroeconomic indicators to support longer‑term capital allocation decisions.

Client adoption – across assets and industry types – reflects the breadth of those use cases. Nuveen has used First Street’s analytics to incorporate physical climate risk into real estate investment decision-making, while Fifth Third Bank has embedded climate intelligence into property underwriting to strengthen lending assessments. Reinsurer RenaissanceRe has used First Street’s property-level flood data to model future loss scenarios across multiple time horizons and event severities, refining its underwriting and capital strategies. Across asset managers, banks and insurers, property‑level climate intelligence is increasingly applied within core investment and risk management workflows. This shift marks climate risk moving from a specialist sustainability exercise into mainstream financial decision-making.

Owning that entire stack, with scientific rigour on one side and decision-useful answers on the other, is what still differentiates us

Tim Barlow

Looking ahead, Barlow says, market attention is expected to broaden from direct asset exposure towards indirect risks affecting suppliers, counterparties and regional economies.

“Within three to five years, physical risk will be priced much like interest rate and currency risk are today,” says Barlow. “The focus will increasingly shift towards the supply chains, counterparties and markets that assets depend upon.”

First Street is already engaging clients on this, Barlow says, and the firm is investing in two areas: the science that quantifies the hazard and the intelligence that traces it worldwide. “So physical risk sits inside the decisions where capital is allocated by investors, banks and the corporates themselves.”

As physical climate risk becomes an increasingly material financial variable, institutions are placing greater emphasis on transparent, scientifically grounded analytics that can withstand regulatory scrutiny while informing everyday investment decisions. First Street’s Enterprise Suite reflects this evolution, establishing climate risk financial modelling as a discipline that integrates physical risk into the capital allocation and risk management decisions that increasingly shape financial performance.