supply-chain
Environmental & Human Rights Supplier Standards | Supplier Engagement | Contractor Safety Program | Contractor Data Privacy | Diverse Suppliers

Updated: March 2021

We strive to address environmental, social and governance elements within and beyond our direct operations. Supply chain plays a pivotal role in our external partnerships, bridging the internal expectations with our suppliers that help us exceed our commitment to our customers. We partner with suppliers who share our commitment toward sustainability and support our vision of a sustainable energy future.

Within APS, supply chain sustainability enables us to manage risks, protect the environment, provide value for our customers and support our communities.

Environmental & Human Rights Supplier Standards

We adhere to high ethical standards of corporate responsibility and are committed to doing business ethically. Toward that end, we provide our Supplier Code of Conduct to suppliers, vendors and others with whom we do business so that expectations for ethical business conduct are clear.  We set clear expectations for the following topics:

  • Laws, Regulations and Contracts
  • Management Processes
  • Anti-corruption
  • No Unfair Business Practices
  • Gift and Business Courtesies
  • Conflicts of Interest
  • Export/Import Control
  • Counterfeit Parts
  • Financial Responsibility/Accurate Records
  • Environmental Management
  • Responsible Sourcing
  • Supplier Diversity
  • Fitness for Duty
  • Employee Health and Safety
  • Security
  • Human Rights and Fair Treatment
  • Human Trafficking and Child or Forced Labor
  • Conflict Minerals
  • Non-Discrimination
  • Subcontracting
  • Reporting Potential Misconduct

Learn more about our Supplier Code of Conduct at aps.com.

Supplier Engagement

We recognize the criticality of our supply chain as we focus on a clean, sustainable future. Ongoing supplier engagement is a necessity to ensure a responsible and resilient supply chain. We engage our suppliers in ways such as industry alliances and supplier recognition.

COVID-19 Response. As the pandemic spread in 2020, our suppliers quickly tackled the unique challenge of assessing material availability risk and responding to shortages and increased demand for needed materials and supplies, including personal protective equipment.  Through our partnerships, our suppliers supported the safety of APS employees by providing COVID-19 prevention and detection materials and ensured APS could keep providing reliable power to customers.

EUISSCA Membership. As a co-founder of the Electric Utility Industry Sustainable Supply Chain Alliance (EUISSCA or the Alliance), we work with peer utilities and suppliers, sharing best practices and participating in industry discussion regarding sustainability. The focus of the Alliance is to improve environmental performance and advance sustainable business practices through collaboration. This helps us advance our sustainability within our organization. 

Through the Alliance, we distribute an annual sustainability survey to our suppliers, which enables a baseline understanding of ESG (Environmental, Social and Governance) performance within our supply chain. The results drive discussions enabling us to engage with our suppliers in advancing our sustainability priorities and projects.

Key Supplier Forum and Awards. We recognize exceptional supplier performance by hosting a Key Supplier Forum and Awards. Success stories are celebrated through our Supplier Excellence Awards nomination process, and awards are presented in five categories: Performance, Customer Service, Value-Added Relationship, Safety and Environmental Sustainability. To qualify for these awards, suppliers must excel in each of these categories. While we were unable to stage the event in 2020 due to the pandemic, we are excited to host it virtually in 2021. 

The Environmental Sustainability Award is presented to suppliers who make responsible choices recognizing the inherent value of the natural world by minimizing their impact through sustainable practices and work toward preserving natural resources. We value the contributions made by these suppliers and integrate their best practices to ensure successful project execution.

Learn more about our key supplier award recipients at aps.com.

Supply Chain Sustainability Council. The Supply Chain Sustainability Council was established in 2019, in partnership with Corporate Sustainability, to identify opportunities for driving efficiency within the company. This increased visibility on supply chain sustainability and collaboration enables solution development. For example, this collaboration led to process updates incorporating sustainability criteria within the procurement bid evaluation process. Through the cross-functional council, we evaluate internal initiatives with a sustainability lens ensuring alignment with organizational priorities.

CDP Supplier Engagement Rating. As part of the CDP climate change questionnaire, we are proud to be recognized by CDP as a Supplier Engagement Leader for the past three years. The Supplier Engagement Rating is earned by those collaborating with suppliers to limit greenhouse gas emissions within the supply chain.  We continue to partner with our suppliers to support APS’s Clean Energy Commitment. 


Contractor Safety Program

Health and Safety are core values at APS, and with the potential risks related to COVID-19, APS has developed and implemented a robust COVID-19 program to ensure a safe work environment for employees, contractors and the public. As part of the critical focus area, all contract companies are required to review and comply with the contractor safety manual and accident prevention manual. Safety performance is monitored throughout the course of the contracted work. If an incident occurs, we ensure appropriate investigation is completed and corrective action plans are established. Further, all contractors are required to review and adhere to the Supplier Code of Conduct before engaging with APS.  We have been conservative in our approach to reducing the spread and exposure of COVID-19. We have developed strict protocols for our employees and contractors regarding social distancing, the use of face masks, travel restrictions, pre-entry health screenings and overall good hygiene practices. Early in the pandemic, we implemented remote work expectations where possible and established a mandatory weekly COVID-19 testing program for employees and select contractors.

In addition to the adjustments made in response to the pandemic, APS kept focus on ensuring a safe and healthy work environment for our direct personnel and contractors. Our essential APS and contractor frontline workers continued to safely execute on critical operations each day. We remain vigilant in our commitment to a safe workplace.

APS has launched initiatives geared toward building on our safety foundation to establish a culture of trust and learning that effectively addresses safety risks and continues to reduce serious injuries and fatalities. In 2020, we shifted our focus from OSHA Recordable injuries to Serious Injuries and Fatalities (SIF) as our primary safety metric. As we move through 2021, the Safety Classification & Learning Model established by Edison Electric Institute will be integrated into our existing programs and event analysis processes Doing so will maintain our current safety system, while focusing on identifying and removing weaknesses to ensure resiliency is built into our work and systems to protect employees. In addition, human and organizational performance education and communication remain a focus with a priority placed on employee supported learning teams and corrective actions that build control risks by establishing a systems-focused workplace. Our contractor safety orientation continues to evolve with enhanced content and facilitation of this safety orientation to contractors will be through our partners at ISNetworld. We continue to work closely with our business partners, contractors, and ISNetworld to improve our contractor safety program to align with APS values and principles.

Contractor Data Privacy

All contractors must adhere to security and data privacy standards and follow industry best practices and applicable regulations. By evaluating contractors’ internal controls and monitoring reputation and financial standing, we further protect sensitive information. Our Data Protection Assurance and Supply Chain teams ensure the company is protected by requiring that contracts with new and existing partners account for cybersecurity risk. All contractors are required to have effective security practices and controls in place, and we work with these partners to ensure our customers are protected from potential third-party data loss.

Learn more about our safety resources and expectations for suppliers at aps.com.

Diverse Suppliers

We regard supplier diversity as an integral and sustainable element of our business. Most of our diverse suppliers are based locally, which reinforces our economic development efforts in Arizona. A diverse roster of suppliers strengthens our business and our community and provides an opportunity to gain innovative ideas from suppliers that reflect our customer base. Our Supplier Diversity and Development (SDD) program helped to enable approximately $409 million in spending with diverse suppliers in 2020.

SDD hosted 11 supplier matchmaking events in 2020 in partnership with local chambers and agencies. The matchmaking events taught suppliers how to do business with APS and connected them with relevant APS employees who regularly utilize similar products and services. In addition, APS is proud to recognize certifications of Lesbian, Gay, Bi-Sexual, Transgender (LGBT) Business Enterprises as a sign of our commitment to diversity and inclusion.

We’ve taken a proactive approach to developing diverse suppliers for more than 20 years. Our Diverse Supplier Training Program (DSTP) provides local and diverse business owners with the knowledge and skill set needed to grow their businesses and work within the utility industry. DSTP is undergoing enhancements to be delivered virtually starting in 2021, enabling APS to expand the reach of the program across the state.

Learn more about APS Supplier Diversity programs at aps.com.

 

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