supply-chain
Environmental and Human Rights Supplier Standards | Supplier Engagement | Supplier Data Protection | Diverse Suppliers

Updated: April 2024

We strive to address environmental, social and governance elements within and beyond our direct operations. Our 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 and Human Rights Supplier Standards

We strive to address environmental and social elements within and beyond our operations while adhering to high ethical standards of corporate sustainability. As our supply chain plays a pivotal role in our ability to achieve this goal, collaboration with suppliers who share our commitment are critical to achieving our vision of a sustainable energy future for all. To that end, we provide our Supplier Code of Ethical Conduct and our Human Rights Policy to suppliers, vendors and others with whom we do business so that expectations for ethical business conduct are clear.

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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
  • Conflict Minerals
  • 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
  • Financial Responsibility/Accurate Records
  • Non-Discrimination
  • Subcontracting
  • Reporting Potential Misconduct

Learn more about our Supplier Code of Ethical Conduct.

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 through sustainability assessments, participation in industry alliances, and supplier recognition and awards.

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Supply Chain Challenges. We continue to manage the unique challenge of assessing material availability risk and responding to shortages and increased demand for needed materials and services. Our robust supply base enables APS to provide reliable power to our customers.

SSCA Membership. APS is a co-founder of the Sustainable Supply Chain Alliance (SSCA or the Alliance), which serves to help us advance our supply chain sustainability efforts and improve our environmental performance through collaboration with other utilities and suppliers. As members, we participate in industry discussions with peer utilities and suppliers, sharing best sustainability practices. APS Supply Chain and Sustainability employees participate in multiple SSCA Working Groups including Supplier Engagement, Scope 3 Emissions, and the Steering Committee. As part of our commitment to the mission of SSCA, APS Vice President of Supply Chain and Chief Procurement Officer, Juli West, will serve as Chair of the 2024 SSCA Executive Committee.

Through the Alliance, we distribute an annual sustainability survey to our suppliers, which enables a baseline understanding of ESG (Environmental, Social and Governance) performance of our supply chain partners. We advance our sustainability priorities and projects by engaging in discussion with our suppliers based on the results of this annual survey.

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 six categories: Performance, Customer Service, Value-Added Relationship, Safety, Community/Diversity, and Environmental Sustainability. To qualify for these awards, suppliers must excel in each of these categories.

Learn more about our key supplier award recipients.

Supply Chain Sustainability Council. The Supply Chain Sustainability Council was established in 2019, in partnership with the Sustainability Department, 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.

Supplier Data Protection

Depending on the products and services provided and the potential for data exchange and technology risk, we may require vendors and service providers to pass the APS vendor risk management program, which sets forth security and data protection requirements, as a condition to doing or continuing to do business with us.

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For contracts with vendors that will handle or have access to certain sensitive data, APS requires contractual provisions setting forth cybersecurity controls, vulnerability management, secure development practices, and other security and data protection requirements. A subset of vendors that meet a predetermined risk profile due to strategic relationships, technology risk, or other factors are continually monitored by a third-party risk management service, and APS annually reviews independent assessments of these vendors.

Diverse Suppliers

Because we value supplier diversity as an integral and sustainable element of our business, we support the communities we serve through partnerships with local organizations.

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Our Supplier Diversity and Development (SDD) Program focuses on three main areas: community building, mentorship and networking, and supplier development. Our partners include local supplier development organizations, chambers of commerce and third-party certification agencies. Through our collaboration and support of these organizations, we support programming that expands the development and growth of our suppliers. Most of our diverse suppliers are based locally, which also 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. We’ve taken a proactive approach to developing diverse suppliers for more than 30 years and our SDD Program helped to enable approximately $453 million in spending with diverse suppliers in 2023.

In 2023, SDD hosted 20 events and engaged over 401 suppliers in training and matchmaking in partnership with local chambers and agencies. The matchmaking events and training sessions taught suppliers how to do business with APS and connected them with APS employees who regularly utilize similar products and services.

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. The DSTP program is a self-paced online program that meets the needs of businesses with flexibility in time and proximity. It also allows a limitless number of people to participate in the free program each year and allows APS to expand its program reach to suppliers throughout Arizona and New Mexico. The online format allows us to easily connect with our suppliers and helps small, local/diverse suppliers develop industry-specific skills and tools needed to be sustainable and succeed in the electric utility industry.

Learn more about APS Supplier Diversity Programs.

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