Pinnacle West Capital Corp

4. OVERSIGHT

4.1. Corporate contribution decisions are made primarily by our Vice President, Federal Affairs, and Vice President, State and Local Affairs, based on the guidelines and objectives described in this Policy. These executives typically receive input from other members of our senior management team, including our Chief Executive Officer.

4.2. During the first quarter of each calendar year management reviews with the Corporate Governance and Political Responsibility Committee of the Board of Directors its anticipated governmental affairs strategies for the year, including the priorities for the Company's political expenditure and lobbying activities. During the year, management periodically reports to the Corporate Governance and Political Responsibility Committee on the progress of the Company's strategy, including any significant activities not encompassed within the initial strategy discussion. Following each of its meetings, the Corporate Governance and Political Responsibility Committee provides a summary to the Board of the matters involving political activities, which were discussed at the meeting. In addition, as part of its reporting responsibilities to the Board after year-end, management summarizes the actions taken in furtherance of its governmental affairs strategies during the year.

4.3. At least annually, the Corporate Governance and Public Responsibility Committee reviews this Policy and recommends to the Board any revisions it deems necessary. Our Board's oversight of our governmental affairs strategy ensures compliance with applicable law and alignment with our policies and Code of Ethics and Business Practices.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]The company regularly engages externally with our customers, communities, industry participants and regulators on a variety of issues including the strategies necessary to achieve our long-term strategic plan, priority sustainability issues, and resource planning priorities to serve our customers in the short and long term. These strategies and priorities are aligned align to our overall climate commitment and vetted through Executive and Board of Directors (BOD) review of our strategies, priorities, and risks and opportunities. We advocate for sound, forward-looking public policy that creates a shared value for our stakeholders. We have a public facing political participation policy addressing engagement that aligns to long-term business interests and the interests of our customers, communities and shareholders. The political participation policy highlights public engagement and decision-making and governance processes for political spending and for reporting of political contributions, in which processes both management and our BOD play important roles. The policy includes:
• Sponsorship of a registered political action committee that engages in independent expenditures concerning specific candidates, initiatives, or referenda.
• Participation in federal, state, and local issues through membership in trade associations which we join to represent various business and industry interests.
• Promotion of the economic health of the jurisdictions we serve through our activities with chambers of commerce.
• Support for charitable and non-profit organizations that support a variety of community and educational endeavors. These organizations, in turn, are at times actively involved in promoting social welfare missions to our elected leaders.
• Engagement through philanthropic giving to drive greater impact through strategic programs, partnerships and grants that align with our vision.