Pinnacle West Capital Corporation · NYSE:PNW
Pinnacle West Capital — ESG Presentation (April 2021)
35 slides from Pinnacle West Capital's sustainability presentation, Apr 15, 2021
Slide 1: 2020 Corporate Responsibility Report Overview
2020 Corporate Responsibility Report Overview April 15, 2021
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements based on current expectations, including statements regarding our earnings guidance and financial outlook and goals. These forward-looking statements are often identified by words such as “estimate,” “predict,” “may,” “
Slide 3: Arizona's Largest Electric Company
AT A GL A N CE Arizona’s Largest Electric Company Service Territory1 Key Facts as of Dec. 31, 2020 Consolidated assets $20B Arizona Revenues $3.6B Market cap ~$9B Generating capacity owned or leased ~6.3 GW Customers 1.3M Current % from clean energy ~50% Nuclear plant in U.S. Largest 1 As of Decembe
Slide 4: Creating a Sustainable Energy Future for Arizona
Creating a Sustainable Energy Future for Arizona “ Our vision for creating a sustainable energy future for Arizona means that we work to advance a clean and healthy environment, a vibrant economy and strong communities, for today and for future generations. ” Ann Becker VP Sustainability, APS ESG Ex
Slide 5: 2020 ESG Highlights
2020 ESG Highlights 1 2 3 ENVIRONMENTAL SOCIAL GOVERNANCE 5
Slide 6: Our Clean Energy Plan
Our Clean Energy Plan Commitments 1 100% clean, carbon-free electricity by 2050 2 65% clean energy by 2030 with 45% renewable energy 3 Exit coal-fired generation by end of 2031 Pathway 2005 2019 2030 2050 24% 50% 65% 100% 6
Slide 7: Coal Exit Strategy
Coal Exit Strategy | 7 Years Earlier than Originally Projected Navajo 315 MW (now retired) Cholla 387 MW retirement Four Corners 970 MW retirement 2018 2019 2025 2031 2038 Coal Free 1 Starting in 2023, Four Corners 7 will move to a seasonal operating schedule that will further reduce annual carbon e
Slide 8: New Energy Sources to Achieve Clean Energy Goals
New Energy Sources to Achieve Clean Energy Goals 2020 Accomplishments Resource Mix Change Today 2035 • Announced our Clean Energy Commitment - provide 100% Coal 14% 0% clean, carbon-free electricity by 2050 Gas 28% 6-17% • Added more than 400 MW of Nuclear 23% 16% clean energy resources • Issued RFP
Slide 9: Advancing on Path to 100% Clean Energy – Three Year Capital Plan of $4.5B
Advancing on Path to 100% Clean Energy – Three Year Capital Plan of $4.5B1 $2,000 $1,800 $1,600 $1,500 $1,500 $1,500 $1,400 Clean Generation $1,262 $314 $392 $406 $1,200 $136 Traditional Generation $203 $1,000 $199 $190 $187 $185 Transmission $800 $169 $181 $179 Distribution $600 $577 $612 $556 $549
Slide 10: Innovation Is Integral to Our Clean Energy Commitment
Innovation Is Integral to Our Clean Energy Commitment Partnerships • Sponsored the Electric Power Research Institute’s Low-Carbon Resource Initiative • Teamed with Advanced Energy Economy to support transportation electrification in Arizona • Partnered with Idaho National Laboratory to assess the vi
Slide 11: Responsible Water Management Supports Viability of Our Communities
Responsible Water Management Supports Viability of Our Communities in the Desert Southwest Water Conservation Commitment to reduce groundwater usage • 2020 – 14%1 reduction in groundwater 2020 – 69% of all water consumed by APS power plants was treated effluent water Projected conservation of ground
Slide 12: Environmental Stewardship Is a Key Consideration in Every Decision
Environmental Stewardship Is a Key Consideration in Every Decision We Make Fire Mitigation Recognition & Commitments • Maintained safe clearances along • We are taking the Million Pollinator 11,000+ miles of distribution lines Garden Challenge by building and 6,000+ miles of transmission pollinator
Slide 13: Environmental Leadership Recognition
Environmental Leadership Recognition 2020 Recognitions OUTSTANDING Environmental ACHIEVEMENT Sustainability and Governance Emerging Tools “A” rating¹ & Technologies 1 Report dated April 14, 2020 13
Slide 14: 2020 ESG Highlights
2020 ESG Highlights 1 2 3 ENVIRONMENTAL SOCIAL GOVERNANCE 14
Slide 15: Swift Action in Response to COVID-19 for Employee Safety
Swift Action in Response to COVID-19 for Employee Safety • Shift to remote work for employees who do not need to be on site • Safety protocols and critical workers weekly testing • PPE, equipment and health screenings • Case tracking and self quarantine requirements • COVID dashboard to keep employe
Slide 16: Support for Customers and Community Impacted by COVID-19
Support for Customers and Community Impacted by COVID-19 APS committed over $15 million in pandemic aid • $12.4 million – Customer support fund • $2.7 million – Community pandemic relief Customer Support • Suspended shutting off power for non-payment mid-March through end of 2020 • Support fund prov
Slide 17: Support and Payment Assistance for Customers
Support and Payment Assistance for Customers Crisis Bill Assistance • Provided to limited-income customers • Up to $800 per year to assist with bills • Pending request for ACC approval for funding increase to $2.5 million annually, with expanded enrollment eligibility Energy Support Program • 25% di
Slide 18: Listening to and Working Together with Customers
Listening to and Working Together with Customers Take Charge AZ Customer Advisory Board Customer Savings • Pilot program to encourage • Gathers direct insight from • Energy efficiency programs electric vehicle adoption by residential customers for our customers have installing charging stations resu
Slide 19: Working with Customers to Meet Our Clean Energy Commitment
Working with Customers to Meet Our Clean Energy Commitment Solar Communities Demand Response Programs Energy Efficiency Proposed Programs • Subscription rate pilot offering rate-optimized smart thermostats • EV-ready pre-wiring and connected water heating in the Residential New Construction • Instal
Slide 20: Investing in Our Communities Through Programs and Partnerships
Investing in Our Communities Through Programs and Partnerships Charitable Causes • Donated more than $11.1 million in 2020 to worthwhile causes Coal Community Transition • Worked collaboratively with stakeholders and leaders to propose a comprehensive coal communities transition plan Arizona Schools
Slide 21: Investing in Our Communities Through Programs and Partnerships
Investing in Our Communities Through Programs and Partnerships Community Support • Employees pledged $2.2 million to United Way and spent an estimated 82,000 hours volunteering Small Business Support • Grants and technical assistance to empower approximately 1,100 small business 21
Slide 22: Supporting Our People to Strengthen Our Company
Supporting Our People to Strengthen Our Company • Virtually hosted 56 summer interns from 11 different universities with a diversity rate of 52% • Robust employee engagement, including 10 Employee Network Groups • Average employee tenure of 12 years due to strong talent retention strategies • Total
Slide 23: Enhanced Diversity, Equity and Inclusion Unites Our Team
Enhanced Diversity, Equity and Inclusion Unites Our Team Employee New Hires Female 2020 Inclusion Diversity in 2020 Officers Council In 2020, we launched our Inclusion Council, comprised of: • The Employee Advisory Board • The Inclusion Steering Committee • 32% are ethnically • 36% were ethnically •
Slide 24: Employee Safety Is Our Top Priority
Employee Safety Is Our Top Priority • Top quartile safety record for OSHA recordable injuries compared to peer electric utilities • For 2020, the number of employees seriously injured on the job has declined by more than 50% • Safety Focus Areas: − Serious Injuries and Fatalities metric − Continue t
Slide 25: Security Awareness and Coordination
Security Awareness and Coordination Examples of Security Initiatives Industry Coordination Anti-phishing campaign and training • Annual phishing identification rate in 2020 of 96.6% exceeds industry average benchmarks and continues to improve year over year Situational awareness campaign and trainin
Slide 26: Partnering with Suppliers Who Share Our Commitment to Sustainability
Partnering with Suppliers Who Share Our Commitment to Sustainability Practices Promoting Sustainability • Our Supply Chain Sustainability Council aims to select suppliers who prioritize sustainability Fostering Diverse Strategic Partners • Supplier Diversity and Development Program enabled $409 mill
Slide 27: Supply Chain Partnering with Suppliers Who Share Our Commitment
Supply Chain Partnering with Suppliers Who Share Our Commitment to Sustainability Practices Supplier Engagement • Member of Utility Supply Chain Alliance with peer utilities and suppliers, sharing sustainability best practices • Key Supplier Forum Awards for exceptional supplies • CDP Supplier Engag
Slide 28: Social & Governance Leadership Recognition
Social & Governance Leadership Recognition 2020 Recognitions HIRE Platinum Medallion AwardUS 2018-2020 Department of Labor US Department of Labor Training Magazine Top 100 Learning and Women in Nuclear Development National Award for Best Organization Public Outreach 28
Slide 29: 2020 ESG Highlights
2020 ESG Highlights 1 2 3 ENVIRONMENTAL SOCIAL GOVERNANCE 29
Slide 30: Our Strong Governance Enables Successful Execution
Our Strong Governance Enables Successful Execution Board Independence Board Oversight • Ten of our eleven director nominees are independent • Newly defined oversight of environmental, • Robust board refreshment, with Director social and governance practices retirement policy by the Corporate Governa
Slide 31: Diverse Board Representation
Diverse Board Representation • 36% of independent directors gender or ethnically diverse • Diversity in skills, knowledge and expertise • Average tenure will be 8.11 years, a 33% decrease from 2016 1 As of May 19, 2021 31
Slide 32: Strengthened Governance Structure to Drive ESG Performance
Strengthened Governance Structure to Drive ESG Performance Jeffrey B. Guldner Board Oversight Chairman of the Board, • Board oversight of strategy and increased emphasis on environmental, President & CEO, social and governance practices Pinnacle West Chairman of the Board • Corporate Governance and
Slide 33: Culture Change – The APS Promise
Culture Change – The APS Promise • The APS Promise represents our commitment to our customers, community and each other • The APS Promise creates a foundation for our work in diversity, equity and inclusion • We will achieve our vision of creating a sustainable energy future for Arizona by embracing
Slide 34: How It Aligns: The 10-Year Strategic Plan
How It Aligns: The 10-Year Strategic Plan • Describes how we will execute our Mission to achieve our Vision • Sets priorities while proactively focusing plans and resources • Guides the business planning process 34
Slide 35: Looking Ahead – Priority Sustainability Issue Assessment
Looking Ahead – Priority Sustainability Issue Assessment Priority Sustainability Issues 35
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