We recognize climate change as a global societal challenge that poses particular challenges and opportunities to our business. Supporting the transition to a lower carbon economy will enhance our business resilience by providing new commercial opportunities, while we manage potential physical risks to the company.
To better understand how the potential long-term impacts of climate change could impact our business, in accordance with the TCFD recommendations, we undertook quantitative climate change scenario analysis and opportunity hotspot mapping to understand the climate issues that could impact the business in the future under different scenarios. We are incorporating these insights in our long-range and medium-range strategic planning to build business resilience.
Climate-related risks and opportunities extend beyond normal business strategic planning cycles. Climate change has the potential to impact Baker Hughes over short (5 years), medium (5-10 years) and long term (beyond 10 years) time horizons. Accordingly, climate change risk and opportunity assessments at Baker Hughes are conducted to include these time horizons. In line with the TCFD recommendations, we divide our risk assessment into two major categories: (1) risks related to the transition to a lower-carbon economy and (2) risks related to the physical impacts of climate change.
The transition risk assessment derives estimated financial impact on our business from modelled portfolio responses to four energy market scenarios as published by the International Energy Agency (IEA): the 1.5°C Net-zero Emissions scenario, the <2°C Sustainable Development Scenario, the Announced Pledges Scenario, and the Stated Policies Scenario. The four IEA scenarios encompass a broad range of energy market scenarios, that when applied to our existing portfolio, may translate to a wide range of revenue impacts across our different businesses. In some cases, these scenarios yield an estimate of increased revenues generated by our existing portfolio.
While we recognize the potential for transition risk, Baker Hughes is playing a key role in enabling an orderly low carbon energy transition. Our growing portfolio of energy transition solutions, products, and services can service growing energy demand with low emissions products, emissions monitoring and measurement solutions, and low-carbon and renewable energy services, for both new and existing customers. In evaluating the short- and medium-term scenarios and factoring in our internal transition risk analysis, we estimate that revenue growth from new energy frontiers should offset revenue declines from our existing portfolio in the medium-term time horizon in all transition risk scenarios except for the net-zero scenario.
Under a long-term scenario, we estimate that our existing portfolio will generate significant growth under the Stated Policies Scenario, along with a growing contribution of revenue growth from our energy transition portfolio. We estimate that potential material declines in revenue from our existing portfolio under the Announced Pledges Scenario, the Sustainable Development Scenario, or the Net-Zero Scenario should be offset by revenue growth from our energy transition portfolio.
The Baker Hughes physical risk assessment models severe weather events using Jupiter predictive climate data analytics and Intergovernmental Panel on Climate Change (IPCC) temperature scenarios.
We estimate an average annual maximum of approximately $90 million in damage and disruption over the long term in a >4°C 2100 IPCC climate scenario (SSP5-RCP8.5) compared to a baseline annual expectation of physical damages of $77 million if unmitigated. We are incorporating the results of this assessment into our strategic business planning and enhancing facility level climate change risk mitigation and adaptation plans.