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Highlights
- Solaris' business operations are based on serving the oil and gas fracking industry in the US.
- Solaris claims that it is making the process of fracking environment friendly by using recycled water.
- Reports suggest that Solaris has filed for a confidential initial public offering (IPO).
Texas-based water pipeline company Solaris Midstream Holdings is reportedly preparing for its public debut and hoping to attract investors who are environmentally conscious and indulge in sustainable investing.
Solaris' business operations are based on serving the oil and gas fracking industry in the US.
Fracking involves the process of drilling into the earth using water along with chemicals and sand to release oil and gas. The process has often drawn criticism from environmental activists as it consumes a lot of water and contaminates freshwater sources.
How can Solaris attract sustainable investors?
Solaris claims that it is making the process of fracking environment friendly by using recycled water and treating the water used in the process.
The company claims that by 2022, it plans to recycle 60 per cent of the water used for fracking, which will be up from 42.1 per cent in 2020.
Solaris has also set a target of recycling all the water it provides for fracking by 2030. To hit its environment friendly targets, Solaris has kept aside US$ 400 million sustainability-linked bonds issued in March this year.
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The water pipeline company uses the money from the bond to refinance debt and redeem ConocoPhillips' preferred equity. Notably, the crude oil producer holds a 30 per cent stake in Solaris.
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As climate change remains a core issue in the US and other countries in the world, companies are trying to reduce carbon emissions and adopt environmentally friendly measures to reduce the stress on the environment. Solaris is also focusing on the environmental, social, and corporate governance (ESG) strategy to achieve sustainability.
Solaris IPO and how to buy the stock?
Solaris is said to be backed by ConocoPhillips, an American multinational corporation.
Reports suggest that the company has filed for a confidential initial public offering (IPO), and could likely go public by the end of this year. If it happens, Solaris could be valued at over US$ 1 billion. The IPO could attract investors who follow ESG principles.
If and when Solaris becomes a publicly-traded company, it could be the first pipeline company to debut since Rattler Midstream got listed in the US stock market in 2019.
However, there is no official communication from the company regarding an IPO, so investors may have to wait for some more time to buy the stock.
Also Read: Allbirds IPO: How soon can you buy this sustainable brand’s stock?
Bottomline
According to the Global Sustainable Investment Alliance (GSIA), sustainable investing in five global markets registered a compound annual growth rate (CAGR) of 7.3 per cent to US$ 35.3 trillion in 2020. This was higher than the CAGR of 3.5 per cent over the past two years.
The global markets in this report were the US, Canada, Europe, Australia, New Zealand and Japan. Sustainable investing is becoming mainstream, and companies dedicated to ESG strategies could benefit in future.
