Climate Change Data

Environmental Metrics

ESG Focus Areas

• Clean Energy
• Customer Satisfaction
• Community Involvement
• Climate Change
• Water Security
• Workforce Diversity
• Environmental Sustainability

Environmental Achievements

• Reduced carbon emissions by 28% since 2005
• Committed to 100% clean, carbon-free electricity by 2050
• Committed to 65% clean energy mix by 2030, with 45% from renewable resources
• Committed to ending all coal-fired generation by 2031
• Named one of the world’s Top Green Utilities 100 by Energy Intelligence

Social Achievements

• Launched redesigned aps.com website and mobile app
• Allocated $2.75 million in crisis bill assistance
• Increased individual benefit for qualifying customers from $400 to $800 annually
• APS Solar Communities program provided clean energy to over 600 low- and moderate-income customers
• Employees contributed an estimated 90,000 volunteer hours and $2.4 million to charitable causes
• Company giving and APS Foundation committed an additional $9.8 million to communities, including $3 million to education
• Signed the UNITY Pledge supporting full inclusion and equality

Governance Achievements

• Increased dividend for the eighth consecutive year by 6%
• Maintained high credit ratings from major rating agencies
• Robust communication and collaboration with the Arizona Corporation Commission (ACC)

Climate Goals & Targets

Environmental Challenges

• Increased regulatory uncertainty impacting shareholder confidence
• Wildfire safety
• Climate change impacts (extreme weather, drought)
• Water supply availability
• Cybersecurity risks
• Competition in retail and wholesale power markets
• Unaligned goals among co-owners of jointly owned generation facilities
• Potential financial risks from climate change litigation
• Employee workforce factors (aging workforce, competition for talent)

Mitigation Strategies

• Focus on robust communication and collaboration with stakeholders
• Increased investment in fire mitigation efforts
• Investments in grid modernization and resiliency
• Comprehensive forest management programs
• Investments in cybersecurity resources
• Clean energy commitment (100% clean, carbon-free electricity by 2050)
• Customer affordability initiative
• Participation in the Western Energy Imbalance Market
• Recruitment, training, and development of new employees

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Long-term agreements for coal, natural gas, and nuclear fuel

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Drought
• Wildfires

Transition Risks

• Regulatory changes
• Market shifts
• Changes in technology

Opportunities

• Development of energy-efficient products and services
• Growth in renewable energy

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Top Innovative Practice award from the Nuclear Energy Institute

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 14% reduction in groundwater use in 2020
• 69% of water consumed by APS power plants came from treated effluent water
• Secured more than 400 MW of clean energy resources (including 200 MW of wind and 75 MW of demand response capability)

Social Achievements

• Distributed $12.4 million in direct bill relief in 2020
• Provided more than $2.2 million in 2020 to support COVID relief efforts
• Employees pledged $2.2 million to the 2020 Community Service Fund campaign

Governance Achievements

• Board changed the name of the Corporate Governance Committee to the Corporate Governance and Public Responsibility Committee
• Amended the Bylaws to reduce the threshold to call special shareholder meetings from 25% to 15%
• Amended the Charter of the Human Resources Committee to include a requirement to periodically review and assess the Company’s strategies and policies related to human capital management

Climate Goals & Targets

Environmental Challenges

• Increased regulatory uncertainty prompted by the 2019 rate case filing
• COVID-19 pandemic
• Transition away from coal-fired power plants

Mitigation Strategies

• Robust communication and collaboration with the Arizona Corporation Commission
• Transitioned employees to remote work environments; implemented safety precautions
• Implemented bill relief programs; provided funding for COVID relief efforts
• Developed a comprehensive Coal Communities Transition plan

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Climate Change and Water Security “A Lists” by CDP (2020)
• ESG “A” rating from MSCI (2020)

Environmental Metrics

ESG Focus Areas

• Clean Energy
• Coal Community Transition
• ESG Governance
• Diversity, Equity, and Inclusion
• Risk Management
• Customer Experience and Community Stewardship
• Workforce Development
• Decarbonization
• Regulatory Environment
• Financial Health

Environmental Achievements

• Procured over 2,500 megawatts of clean energy and storage expected to be in service by 2025.
• Achieved 51% clean energy in energy supply (including nuclear, renewables, and demand-side management) and 12% renewable energy in sales in 2022.

Social Achievements

• Launched a multi-year DEI strategy and roadmap.
• Established 10 employee network groups.
• Provided financial support to coal communities: $10 million to Navajo Nation, $500,000 to Navajo County communities, and $1 million to Hopi Tribe (plus additional funds for electrification).

Governance Achievements

• Established a metric tying executive compensation to the installation of new carbon-free generating resources.
• Created an ESG Executive Council to guide ESG strategy and reporting.
• Revised performance share grant metrics to include a clean megawatt installed metric.

Climate Goals & Targets

Environmental Challenges

• Transitioning from coal-fired generation by 2031.
• Managing climate change risks (drought, storms, wildfires).

Mitigation Strategies

• Developed a coal communities transition plan with financial and economic development support.
• Enterprise-wide risk identification and assessment process to manage short, medium, and long-term risks.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Drought
• Monsoon storms
• Forest fires

Reporting Standards

Frameworks Used: TCFD, SASB