Enhancing MSCI’s climate-risk intelligence
Fathom’s data strengthens the coverage and accuracy of MSCI’s physical risk solutions, helping its financial sector clients to better measure, mitigate and manage the flood risk to assets and investments
The challenge: Giving clients confidence in location-level data
MSCI is an investment research firm that provides risk and performance solutions to the global investment community. Most of its clients, which range from banks and real estate investors to insurers and asset managers, are affected by climate change, whether that’s extreme weather damaging their physical assets or changes in regulatory requirements around risk disclosure.
A large proportion of MSCI’s clients are exposed to flood hazards through their investments, loan books or directly owned assets (for example, 40% of companies in the MSCI GeoSpatial Asset Intelligence database), which is why flood risk data is incorporated into its solutions to give clients a calculation of their flood risk at the level of individual locations, portfolios or entire books of business.
Find out how financial services companies are using Fathom’s flood risk tools
Precise flood-risk assessments
MSCI’s tools help clients assess, mitigate and report on their climate risk exposure. Its Climate Value-to-Risk (VaR) metric enables asset managers to quantify in US dollars the impact that climate risk will have on company valuations. Another offering is the GeoSpatial Asset Intelligence dataset, which provides location information on 1 million assets around the world.
“Our Geospatial Asset Intelligence product is very much about assessing every single location of companies,” says Matthias Kemter, Senior Associate, MSCI Research. “We also have a real estate tool where clients can provide any type of location and we can give them a climate or a physical risk assessment. Consistent global coverage is important because we need to be able to cover any place in the world in real-time.”
To give clients confidence in these climate risk tools, the underlying data needs to be reliable, granular and global. For this reason, the company wanted to upgrade from the first-generation flood model it had been using to a newer model based on the latest, highest-quality flood data.
The solution: Partnering up to provide high-quality flood data
A major requirement for the new flood model was that it offered full global coverage, with no significant gaps or inconsistency in data quality.
Fathom’s Global Flood Map is the most comprehensive flood hazard dataset available. It also covers all three major flood perils – pluvial, fluvial and coastal – for any return period and any projected combination of future year and climate scenario up to 2100.
“That full climate coverage was important for us,” says Matthias, “because we cover 11 different climate change scenarios and we needed to be able to map that data to our scenarios.”
Resolution was another major factor. The flood maps previously used by MSCI were ~90m, while Fathom’s Global Flood Map offers ~30m resolution.
Fathom’s Global Flood Map offered consistent global coverage, all the required climate scenarios and the finer resolution that would allow MSCI to upgrade its offer to clients.
The result: More granular, accurate flooding insights
By licensing Fathom’s Global Flood Map, MSCI was able to offer new capabilities and client value with its climate risk platform. Incorporating Fathom’s data into its range of products allows MSCI to:
- Measure climate-related risks under different future climate scenarios
- Offer real-time assessments on any individual location
- Develop its GeoSpatial Asset Intelligence product due to increased confidence in providing location-specific data
- Provide insights on pluvial flooding to its clients for the first time
Armed with a combination of Fathom’s flood data and MSCI’s climate risk data, clients are now better able to benchmark, manage and mitigate the impacts of flooding on their investments, at an individual asset level and across portfolios.
Related case studies
AXA: a cutting-edge catastrophe model for Europe
Learn how Fathom and AXA built a state-of-the-art catastrophe model that strengthens AXA’s financial resilience and regulatory reporting.
Arup & World Bank
Fathom & Arup demonstrate how rapid, data-driven flood modeling can quantify the impact of urban greening on flood extent, soil erosion, and urban heat. Discover how NBS can create more resilient cities.
Texas Water Development Board
Texas Water Development Board uses Fathom data, and others, to accelerate the development of the first statewide flood planning program in the absence of publicly available flood data.
FEMA’s Risk Rating 2.0
Fathom provided FEMA with a more accurate, up-to-date picture of US flood risk which informed how the NFIP prices insurance, using Fathom-US flood map.