MSCI Inc

Trends in Sustainability and Climate Investment Strategies

We believe sustainability and climate risks are investment risks that significantly impact many investment decisions, regulatory frameworks and corporate strategies. In Europe, disclosure requirements continue to drive demand for sustainability and climate tools to meet both regulatory and investor expectations. In the United States, political debate has led to some scrutiny of the use of sustainability and climate considerations in investment and risk management decisions.

The Company’s growth in this space depends on rising global demand for sustainability and climate solutions, which may be influenced by potential regulatory uncertainty or political opposition in certain markets. While some markets may face greater near- term challenges and uncertainty, we believe the long-term shift toward integrating financially material sustainability and climate factors into investment and risk management processes will support continued adoption of our sustainability and climate focused tools.

Asset Management Industry Dynamics

In recent periods, the asset management industry—a key client segment for the Company—has undergone fee pressure and consolidation, driven by structural shifts, intensifying competition and evolving investor preferences. While industry fee pressure and consolidation may result in cost-cutting and vendor consolidation, firms may require more sophisticated and a broader array of investment tools across use cases and asset classes, driving demand for the Company’s offerings.

The impact of this fee pressure and consolidation remains uncertain, as client cost pressures could lead to contract adjustments or terminations, while asset managers may expand their use of the Company’s products and services, including for additional investment strategies. The extent to which these dynamics will impact the Company’s growth, client retention and revenue generation will depend on the pace of industry fee pressure and consolidation, evolving client priorities and the Company’s ability to adapt to shifting market demands.

See Item 1. Business—Industry Trends and Competitive Advantages and—Strategy, and Item 1A. Risk Factors—Client Risks of this Annual Report on Form 10-K for additional discussion of client trends and related risks.