Central to this effort is fortifying and maintaining positive relationships with customers, our workforce, external stakeholders, regulators and the financial community to ensure the resilience of the company’s financial health and longevity. The 10-Year Strategic Plan sets priorities while proactively focusing plans and resources. It is designed to ensure employees and other stakeholders are working toward common goals with established an understanding around envisioned outcomes. This encourages a clear and ambitious organizational direction in response to a changing environment. The 10-Year Strategic Plan is designed to be the strategic instrument that articulates where we are headed, and the actions needed to progress. It also adopts the APS Culture Principles, which will guide us in how we measure success. Fundamentally, the 10-Year Strategic Plan will guide the disciplined efforts and essential decisions and actions taken to shape what we do, what we stand for, whom we serve, and what we strive to become.

To establish an effective strategy, the officer team looked at more than 60 potential drivers of change (broader, societal forces impacting the energy industry and utility sector) to understand which are most likely to transform the future of our business and the communities we serve. They identified six critical areas expected to greatly impact our business over the next 10 years. As the officer team considered how to address the six identified Drivers of Change most likely to impact our business, five Long-Term Issues (LTI) emerged as priority areas of focus during the next 10 years. These LTIs were established to ensure employees and all stakeholders are effectively aligned toward common goals with established understanding around envisioned outcomes:

• Focus on Customer Experience and Community Stewardship
• Support an Evolving Workforce
• Decarbonize and Manage Generation Resources
• Achieve a Constructive Regulatory Environment
• Ensure Long-Term Financial Health

Our business plan defines how each business unit executes our strategy. Tiered metrics provide a clear look at what the company is trying to accomplish by measuring what matters. Our performance management program recognizes and rewards individual contributions to priority work.

The initiatives supporting the business plans align with the LTIs. These plans help us prioritize our work, collaborate across the organization, align our resources and measure our progress with rigor and discipline. Our performance compensation across the business is connected to business unit performance, individual performance and value-driving tiered business metrics.

We have several goals and environmental and social indicators that we use to measure progress and hold ourselves accountable. See our ESG performance data.

Learn more about our 10-Year Strategic Plan.

Our Integrated Resource Plan (IRP) details how we plan to serve our customers’ energy needs for the next 15 years, which includes an interim target of achieving a 65% clean energy mix by 2030. We are focused on integrating renewable resources, empowering customers with flexible energy efficiency options and incorporating advanced technology to produce 100% clean and affordable energy—all while providing reliable service and remaining good stewards of Arizona’s diverse environment.

Here's how we plan to take our commitment to clean energy to the next level:

• Eliminate the use of coal in energy generation by 2031.
• Add renewables, including solar paired with storage to harness Arizona’s sunshine. 
• Continue to invest in vital carbon-free resources such as nuclear energy from Palo Verde Generating Station.
• Engage customers through expanded energy efficiency programs and smart energy choices.

Learn more about our Integrated Resource Plan.

The decision to do so was driven by growing stakeholder interest and a recognition that an informed sustainability strategy is critical to delivering business value. The assessment strengthened our existing commitment to sustainability and established a foundation on which to develop programs that address the most important sustainability issues. The project was designed to build on existing APS efforts to understand stakeholder interests; leverage EPRI expertise; inform future Sustainability and Corporate Responsibility Reports; and advance a robust sustainability perspective to drive performance.

We leveraged input from employees, large customers, limited-income advocates, economic development groups, environmental non-governmental organizations, leading sustainability academics and other stakeholders to identify and assess the sustainability issues that matter most. In total, 23 Priority Sustainability Issues ("PSIs") were identified and prioritized. The most critical category, Integral Shared Value, includes four issues deemed most important and most able to be impacted by our actions: clean energy, customer experience, energy access and reliability and safety and health. These Integral PSIs provide the foundation for informing our strategic direction, creating a framework for incorporating best practices and driving enterprise-wide alignment and accountability.

In 2021, the Company engaged EPRI for the second phase of this work, focused on benchmarking best practices within these four Integral Shared Value PSIs. We will utilize the benchmarking information to identify opportunities for further improvement in our ESG performance in 2022.

Learn more about our Priority Sustainability Issues.

Risks are identified, assessed and prioritized based on the likelihood and impact of their occurrence. Each business area maintains an inventory of its most significant risks and associated risk mitigation plans. Annually, business areas record this information in a prescribed format, for analysis, categorization, and prioritization of risks to support development of an enterprise risk profile.

Executive leadership reviews the enterprise risk profiles and provides the board of directors with a report of the company’s top risks on an annual basis. Consistent with the NYSE rules (NYSE Rule 303A), the Audit Committee annually reviews the company’s “risk assessment and risk management” policies. For APS, climate change risks include drought, frequency and intensity of monsoon storms and forest fires. The enterprise-wide risk identification and assessment process contemplates short-, medium- and longer-term risks.

Learn more about our risk assessment in our most recent 10K.