A grouping of several related Azure Policy definitions that are assigned together to a scope (management group, subscription, resource group), simplifying management of policies that share a common goal (e.g., ISO 27001 compliance).
AZ-305 distinguishes this from a single policy: an initiative (policySet) groups policies to evaluate aggregate compliance. Key effects to memorize: Deny (blocks creation), Audit (logs without blocking), DeployIfNotExists (automatically remediates by deploying a resource).
Azure Policy initiative is a concept that can show up on the exam. Check the full guide to see it in context.