ZF Group, a global technology company with its North American headquarters in Northville, specializes in systems for passenger cars, commercial vehicles, and industrial technology. With a focus on next-generation mobility, the company develops solutions that address electrification, automation, and digitalization while aiming to improve safety, efficiency, and sustainability in transportation.

SBN Detroit interviewed Anuj Shah, Sustainability Lead, for the Americas, to explore the most pressing environmental challenges in the region’s mobility and manufacturing sectors – and how technology, collaboration, and design innovation are shaping a more sustainable future.

Q: What are the most pressing sustainability challenges facing the mobility and manufacturing industries in Southeast Michigan today?

A: One of the biggest challenges is decarbonizing our complex supply chains. To give you an idea of scale, ZF in North America alone has about 3,700 direct suppliers, and as you move further upstream, that number multiplies. Many Tier 2 and Tier 3 suppliers lack the tools and resources to track, manage, and reduce emissions. ZF is driving progress in this area through our supply chain sustainability program and to support our supply base, we have established a supplier sustainability training academy that offers trainings around several topics like responsible sourcing, use of green electricity and how to meet requirements set forth in our sustainability bid conditions. It is a fundamental change in philosophy in how we interact with our suppliers in the development of products and processes, and in the choices we make.

Another challenge is sourcing sustainable materials. As demand for magnets and critical raw materials rises, our commitment to responsible sourcing – guided by human rights and environmental due diligence policies – becomes even more critical. Ideally, we start with using less, then designing products that can accept higher recycled content materials, and where technically feasible, designing with circularity in mind to provide access to these materials to bring them back into the loop.

Q: As the auto industry shifts toward electric and digital systems, where do you see the biggest opportunities for companies in Michigan to lead in sustainable innovation?

A: I see two major areas of opportunity. First, digital twins and predictive sustainability. With advances in AI, IoT and cloud computing, we continue to gain the ability to simulate and optimize sustainability across a product’s entire lifecycle. Michigan companies have the potential to drive breakthroughs here, unlocking real-time emissions tracking, predictive maintenance, and more circular design outcomes. At ZF, for example, our SCALAR platform provides real-time diagnostics to fleet operators. It’s a fleet management solution that offers remote diagnostics on vehicle health using smart sensors, telematics, and predictive maintenance that combines historical and live data to forecast potential failures and propose proactive maintenance.

Second, there’s room for innovation in product design that balances cost, supply chain resilience, and sustainability, like reducing reliance on rare earth magnets. For example, ZF’s Separately Excited Synchronous Motor (SESM), a magnet-free e-motor technology.

Q: How important is collaboration across suppliers, OEMs, government, and academia in accelerating sustainable progress?

A: Collaboration is essential. The scale and complexity of sustainability challenges demand system-level thinking and collective action.

Collaboration can take many forms, and start with small steps by sharing common standards, targets, and data. This enables clarity and provides a common language when working to decarbonize the value chain and develop more circular materials.

Collaboration can also help leverage scale through greater partnership between OEMs and suppliers to take advantage of installed capacities and build upon existing competencies to lower cost and increase re-usability of infrastructure. This requires strong feedback loops between industry partners, sometimes requiring flexibility in design parameters to accommodate available off-the-shelf solutions.

Some examples at ZF: We engage with our suppliers around ESG Goals, best practice sharing, and sometimes co-developing decarbonization roadmaps.

We also work with external organizations like MEMA and AIAG, providing inputs on policy, contribute to white papers, and align on best practices on various topics like human rights and supply chain transparency. These platforms are critical for creating a consistent approach across the industry.

Q: The mobility industry is under growing pressure to quantify and reduce emissions. How is the conversation around Scope 3 evolving, and what tools are helping drive accountability?

A: The conversation around Scope 3 has evolved rapidly, from awareness to tangible action. Just a few years ago, many companies were working to define and estimate these indirect emissions. Today, Scope 3 is front and center, especially in the automotive industry, where upstream and downstream emissions make up the majority of a company’s emissions.

At ZF, we’re approaching Scope 3 with a focus on data integrity, supplier engagement, and cross-industry collaboration

Transparency and supplier engagement are key. We are systematically working to move away from secondary emissions data and working closely with our suppliers to gather more accurate product-specific emissions data. This is critical for building trust and accountability across the value chain.

Regarding our emissions, disclosure alone isn’t enough; our stakeholders expect us to present clear decarbonization roadmaps. Many of our customers have also defined product-level and material-level carbon footprint targets, which is helping shift the broader industry mindset.

We’re also participating in initiatives like Catena-X, which helps standardize the sharing of ESG metrics. That kind of consistency enables more meaningful collaboration across the value chain.

Ultimately, Scope 3 is where the real transformation happens — and it’s also where the greatest opportunity lies. By working together across the value chain, we can drive measurable, lasting impact.

Q: You’ve spoken about the importance of embedding sustainability early in product development. How does that shift impact timelines, cost, and engineering culture?

A: This is a topic close to my heart. I’ve spent the last three years focused on embedding sustainability into product development, and it really does all start here. Around 80% of a product’s environmental footprint is determined at the design stage, so we must rethink how we define value, performance, and innovation.

Embedding sustainability upfront does add time during the concept phase, but that investment pays off by reducing rework and helping avoid costly redesigns later, especially as the regulatory and customer requirements continue to evolve. On the cost side, we push for a business-first mindset and a balanced approach. Sustainable designs, when done right, can lead to energy savings, provide supply chain resilience, and even unlock new business models.

Culturally, this shift is creating an integrated systems-thinking approach. It’s not just about checking boxes to get a product out the door. All departments need to be aligned around sustainability as a shared goal and the tools and processes provided should allow them to make informed decisions without slowing down innovation

And engineers are problem-solvers by nature. When you frame sustainability as a design challenge with real-world impact, it becomes a purpose-driven mission.

Q: What role does Southeast Michigan’s technical workforce play in accelerating this transition, and what skills or mindsets are most critical moving forward?

A: This region has a deep bench of industrial and engineering talent, and that gives us a real advantage. Looking ahead, the workforce will need to be equipped to manage emissions, energy use, and materials, especially as Scope 3 expectations rise.

It’s also about mindset. Sustainability can’t be an add-on, it has to be embedded into everyday decisions. Upskilling and continuing education will be essential, not just in sustainability topics, but also in emerging technologies that enable it.

Q: What policies, technologies, or shifts do you believe will most shape the future of sustainable manufacturing in Michigan, and how can companies prepare now?

A: On the policy front, climate disclosures are becoming the norm worldwide. OEMs and suppliers alike will need to provide increasingly transparent data across operations and products.

On the technology front, advances in AI, digital twins, and smart factories are accelerating our ability to optimize energy use, emissions, and material flows in real time. Materials science is also evolving, whether through decarbonizing legacy materials or developing new, sustainable alternatives.

The companies that stay close to these developments and integrate them thoughtfully will be the ones that lead. Many OEMs are already incorporating ESG metrics into supplier scorecards. Sustainability isn’t just a differentiator anymore, it’s a prerequisite.

To prepare, companies need to embed sustainability early, stay engaged with regulatory trends, build robust data infrastructures and ensure their workforce is equipped to meet the challenges ahead.

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