The head of an international organization for the world’s legacy oil and gas giants says the energy transition will be powered by both “fear and greed”—that is, public and financial pressure on his members to address the environment, and the sheer scale of the financial opportunity for those that invest.

“Fear of stranded assets, fear of being divested, fear of being booed out, or fear of failure to attract talent, for instance. Or a failure to avoid litigation or avoid regulations. That’s the fear side,” says Bjørn Otto Sverdrup, the Norwegian chair of the Oil and Gas Climate Initiative (OGCI), which counts Shell, Exxon Mobil, Saudi Aramco, and the China National Petroleum Corp. (CNPC) among its members.

“And then it’s also the greed side, as I call it,” notes Sverdrup. “There’s going to be a huge, huge, unbelievable growth in renewables. There is going to be a complete transition of the energy system. And there’s going to be a lot of winners in that.”

Sverdrup, who is also the former senior vice president of corporate sustainability at Equinor, the Norwegian energy giant, spoke to Fortune at the TED Countdown conference earlier October 2021, ahead of the COP26 climate conference. The United Nations summit begins on October 31, 2021, and has been described as a make-or-break moment for global climate action.

The COP26 summit, taking place in Glasgow, comes after the Intergovernmental Panel on Climate Change’s landmark report earlier 2021 warned of a “code red” for civilization on climate change. If further warnings were needed, on October 26, 2021, the UN reminded participants again that the globe is on track for catastrophic warming of 2.7 degrees Celsius by 2100, far above the target of 1.5 degrees set by the Paris Agreement, adopted in 2015 at the last major climate conference.

Although the emissions targets of national governments will be the initial focus of the conference, oil and gas companies are under increasing pressure for signs of how—and how fast—they will reduce their emissions, and transform their businesses. The often intense conflicts between managing a legacy oil and gas business, and mounting pressure over climate, were clear at the TED conference, where a young Scottish climate activist angrily confronted Ben van Beurden, the CEO of Shell, which was one of the first major oil companies to announce a target of net-zero emissions by 2050.

Equinor, too, has a target to reduce its emissions to net zero by 2050—a target that includes Scope 3, or the emissions burned when its products are used to fuel cars or planes. European majors, including BP and TotalEnergies, have often been at the forefront of announcing targets at least, to decarbonize their industry. (Though Shell is appealing an order from a Dutch court to speed the pace of its decarbonization.)

U.S. catching up?

The comparative embrace of decarbonization in Europe has often stood in contrast to the foot-dragging of the U.S. majors—particularly Exxon Mobil and Chevron, which have yet to announce a net-zero target that includes Scope 3 emissions—and major national oil companies. In September 2021, Chevron announced targets that focus on emissions intensity, a measure which requires production to become more efficient, but can actually allow emissions to increase on an absolute level if production growth outstrips those reductions.

Those targets are much more in line with those of the group Sverdrup leads, with all OGCI members as of September signing up to reduce the emissions intensity of their oil and gas production to net zero by 2050. Though that falls far short of Equinor’s own goals, Sverdrup defended the standard, pointing to the willingness of mammoth state oil companies—Aramco, Petrobras, and CNPC—to sign up for them. The volume of emissions covered in the target is a gigaton, he says.

“The gap between the European companies and, for instance, the U.S. companies in their approach to climate and how they talk about it—I would say it was more different a year ago than it is today. I think it’s going to be even less different a year from now,” he notes.

The industry is also feeling the pressure, Sverdrup says, to reassess what a “healthy” portfolio of energy assets will look like going forward. Meanwhile, oil exploration is down about 50% over the past five years, to a 15-year low—though not entirely because of climate policy.

“Are there opportunities to make big discoveries? It’s the geology. It’s also the cost,” he says. “And then, possibly, they also show stranded asset risks.” With the decades-long lead times of traditional oil and gas exploration and production, companies are reassessing what they can afford to keep on the books. It’s these decisions where questions of fear and risks, and the benefits of the new energy economy, emerge.

Then again, Sverdrup understands the suspicion that might attach itself to an oil and gas association saying it is pushing its members to act on climate change—given the long and checkered history of industry associations in both Europe and the U.S. on climate policy.

Many people are “giving up on [the industry’s] ever changing, or are impatient and also disappointed, because of a lack of action for many years. And I understand that impatience; I’m also impatient,” he says. But the industry can be persuaded to actually embrace the energy transition, Sverdrup argues.

“We can turn into change agents in a way to make things happen faster,” he adds. “And I seriously from the bottom of my heart believe that we are better off doing that than ignoring it.”