“Mr Fukui did not like batteries, but I am different. Honda has no future unless we achieve significant reduction in CO2 emissions.”

And with that, the newly installed Honda CEO Takanobu Ito swept aside the legacy of his predecessor Takeo Fukui and set new directions that he hopes will lay the foundations for the company’s survival.

It would be interesting to know how often this sort of scenario has been, or is about to be, repeated in boardrooms across the globe, as corporate leaders and directors face up to the challenges, and the opportunities, of adapting to a low-carbon economy. Or indeed, how often it has been reversed, as some companies entrust their future to the products of the past.

At Honda, at least, there were no such qualms about the need to adapt. “The next 10 years will be true test for Honda’s survival,” Ito said. “It’s a time of major changes, a time of increased environmental awareness and changes in the global economic structure.”

Ito was speaking after Honda, the last major car manufacturer to enter the electric vehicle market, unveiled a suite of new hybrid and electric products, ranging from vehicles, to motor bikes, bicycles, personal transport devices and home energy appliances.

Honda had hitherto placed its future in the belief that manufacturing the most fuel efficient cars would be the key to its longevity. Fukui had dismissed plug-in hybrids as recently as 2007. It turned out to be the wrong call, and the roll-out of an EV and plug-in hybrids in the next two years is the key plank of Honda’s new strategy to catch up with the rest of the industry.

Trying to make the right call on low carbon is a problem bedeviling businesses and business groups everywhere, not just on a single corporate level, but across a broad industry as well. One only has to observe the extraordinary split in the US between its chamber of commerce and several key corporates, and the recent exchange between European business groups and individual businesses after the UK, German and French governments urged the EU to move to a more ambitious greenhouse reduction target of 30% below 1990 levels.

The three country’s environment ministers had argued in a letter to the Financial Times, and later other media groups, that weak carbon prices were undermining investments in low-carbon technologies, and a higher target was essential to ensure that European businesses remain competitive with corporations in China, Japan and the US.

Business organisations such as Eurochambres, the association of European chambers of Commerce, and EEF, the UK manufacturers’ group, responded angrily, describing the proposals as “absurd”, “alarming” and “naïve”. EEF CEO Terry Scuoler said there was no clear correlation between competing in the low carbon global marketplace and setting a tougher and unilateral target for reducing emissions.

Days later, the chairman and CEOs of 27 major corporates wrote to the FT in support of the ministers, and were critical of their own trade organisations, highlighting the deepening rift in business circles over how fast to move on climate change.

The authors noted that weak carbon prices had seriously undermined domestic investments in low-carbon technologies, as well as the development of emissions trading internationally.

“Yet it is critical that we exit this recession in a way that lays the foundation for low-carbon growth and avoids locking us into a high-carbon future,” they wrote.

“By moving to a higher target, the European Union will have a direct impact on the carbon price through to 2020 and deliver the economic signals that companies need if they are to continue investing billions of euros in low-carbon products, services, technologies and infrastructure.

“European leadership will also help rebuild the international momentum towards an ambitious, robust and equitable global deal on climate change.”

The EU’s future competitive advantage lies in encouraging and enabling its businesses to help drive the transformational change that will occur in the world economy within the next couple of decades, not to hide from it.

Last year, several companies resigned from the US Chamber of Commerce in protest at its views on climate change, while several others piled pressure on the group to change its stance.

The companies that signed the letter also included Lloyd’s, Johnson Matthey, L’Oreal, Thames Water, Nestlé, Deutsche Telekom, Vodafone, Acciona, Allianz, Capgemini, Centrica, Tesco, Royal Philips Electronics, BT, and Beluga Shipping.

This item originally appeared in Climate Spectator.