As the climate crisis intensifies and as the wide-ranging economic impacts are felt up and down supply chains across continents, business leaders and governments cannot ignore the mounting economic risks, a report from McKinsey said Thursday. "Much as thinking about information systems and cyber-risks has become integrated into corporate and public-sector decision making, climate change and its resulting risks will also need to feature as a major factor in decisions," McKinsey Global Institute director Jonathan Woetzel said in a statement.

A dog looks out of a house flooded by Hurricane Maria, in Catano town, Juana Matos, Puerto Rico, on September 21, 2017. Hector Retamal | AFP | Getty Images

The study focused on the physical effects of climate change, including on individuals and communities, as well as infrastructure and natural capital, and found that the knock-on effects from a changing planet are accelerating. This is primarily because while direct impacts such as hurricanes might be felt locally, the repercussions can get kicked down the supply chain and have surprising effects as communities become more interconnected. In Florida, for instance, rising tides could cut property values and reduce tax revenue. Or in India, McKinsey found that rising temperatures — and the subsequent hours of labor lost due to unsafe conditions — could shave as much as 4.5% from annual GDP. Around the world, rising ocean temperatures could reduce fish harvests, thereby impacting as many as 800 million people worldwide who rely on revenue from the industry. The study said trillions of dollars in economic activity and hundreds of millions lives are at risk. The impacts are already being felt — fires are raging in Australia and hurricanes have become ever more destructive.

Lack of preparation