LP-750: Lux Vision Fund ESG Investment Framework

Abstract

Lux Vision Fund invests only in ESG-aligned opportunities. This LP establishes the master framework governing how Environmental integrity, Social benefit, and Governance accountability are defined, measured, and enforced across all investments. Returns and restoration reinforce each other—by design, not by accident.

Motivation

Traditional investment frameworks treat ESG as an optional overlay or marketing exercise. This creates misaligned incentives where capital optimizes for short-term returns at the expense of environmental and social outcomes. Lux Vision Fund requires a foundational framework that:

1. Structurally integrates ESG - Making impact measurement and accountability core to investment terms, not optional addenda
2. Prevents greenwashing - Requiring verifiable, measurable outcomes before any public claims
3. Aligns long-term incentives - Using tranched capital deployment tied to verified milestones
4. Enables transparent reporting - Building trust with LPs, regulators, and the public through auditable evidence
5. Coordinates ecosystem actors - Defining clear roles for Lux (capital), Hanzo (technology), Zoo (mission), and DAOs (governance)

Without this framework, ESG investments risk becoming performative rather than substantive, undermining both returns and restoration goals.

Core Values (Non-Negotiables)

1. Everyone Benefits, Not Just Capital

We design investments so value accrues to communities, contributors, customers, and the environment—alongside LP returns. This is structural, not aspirational.

2. Proof Over Promises

Impact claims are only valid if they're measurable, attributable, and auditable. If we can't measure it, we don't market it.

3. Long-Term Ownership and Compounding

Community governance and IP stewardship ensure long-tail value doesn't get extracted and disappear. DAOs retain ownership so contributors capture value from what they help build.

ESG Pillars Summary

Pillar	Principle	Core Question
E - Environmental	Measurable improvement, not vibes	Does this reduce net harm or create net-positive restoration vs. baseline?
S - Social	Opportunity, dignity, and resilience	Does this create real economic mobility and protect against exploitation?
G - Governance	Accountability through architecture	Is this auditable, privacy-preserving, and community-governed?

The Lux–Hanzo–Zoo Ecosystem

Role Architecture

Entity	Layer	Function
Lux	Finance	Forms and deploys capital, builds settlement and reporting rails, hard-codes accountability into funding terms
Hanzo	Creation	Incubates and deploys frontier tech (AI/robotics/quantum) with efficiency, safety, and privacy-first architecture
Zoo	Mission	Anchors public benefit across all life, sets ethical boundaries, ensures programs remain restorative and non-extractive
DAOs	Ownership	Steward IP and governance so communities capture long-tail value from what they help build

The Flywheel of Good

┌─────────────────────────────────────────────────────────────────┐
│                                                                 │
│  1. Lux funds projects that meet strict E/S/G gates            │
│           ↓                                                     │
│  2. Hanzo reduces risk + cost through better tech,             │
│     automation, verification, and efficiency                    │
│           ↓                                                     │
│  3. Zoo ensures mission integrity with life-first lens         │
│           ↓                                                     │
│  4. DAOs retain community ownership, route long-tail           │
│     value to contributors and public benefit                   │
│           ↓                                                     │
│  5. Transparent reporting builds trust, attracts               │
│     more LPs, banks, and public participation                  │
│           ↓                                                     │
│  6. More capital + better execution = bigger outcomes          │
│           ↓                                                     │
│  ─────────────────── REPEAT ───────────────────────────────→   │
│                                                                 │
└─────────────────────────────────────────────────────────────────┘

Net result: A compounding system where returns and restoration reinforce each other instead of trading off.

Investment Process

Stage 1: Intake + Eligibility

Check	Requirement
SDG alignment	Clear mapping to relevant UN SDGs
E/S KPIs proposed	Material metrics identified
Governance/compliance	Structure supports accountability
Tech safety	Privacy and safety review (if applicable)

Stage 2: Impact Design

Element	Deliverable
Baseline	What does the world look like without this project?
Targets	Quantified outcomes with timelines
Measurement plan	Data sources, methodology, verification
Covenants	Binding commitments written into deal terms
Tranche schedule	Capital release tied to verified milestones

Stage 3: Deploy + Verify

Activity	Standard
Milestone verification	Third-party or auditable self-verification
Evidence logging	On-chain where possible; hashed where private
Capital release	Only when milestones are met
Claims registry	Every claim logged with evidence hashes

Stage 4: Operate + Report

Reporting	Frequency
Dashboard updates	Quarterly
Deep reports	Annual
Incident transparency	As they occur
Remediation tracking	Until resolved

Stage 5: Scale Responsibly

Outcome	Action
Exceeds targets	Cheaper capital, larger allocations
Meets targets	Standard renewal terms
Underperforms	Correction plan required
Non-compliant	Paused or terminated

Enforcement Mechanisms

Outcome-Gated Capital

Capital is deployed in tranches tied to verified milestones. No milestone verification = no next tranche.

Claims Registry

Every environmental or social claim is logged with:

• Evidence hash (IPFS or on-chain)
• Verifier attestation
• Methodology reference
• Date and version

No-Greenwashing Rule

If we can't measure it, we don't market it.

Any public claim about E or S impact must have:

1. Defined baseline
2. Quantified target
3. Verifiable data source
4. Third-party attestation (for material claims)

Privacy-Preserving Verification

We prove outcomes without exposing personal data:

• Zero-knowledge proofs where applicable
• Aggregated statistics
• Anonymized samples
• Verifier attestations on methodology

Related LPs

Investment Policy Series

• LP-751: Environmental Integrity Investment Policy
• LP-752: Social Benefit Investment Policy
• LP-753: Governance & Ecosystem Architecture

Network ESG Series

• LP-800: ESG Principles and Commitments
• LP-801: Carbon Accounting Methodology
• LP-850: ESG Standards Alignment Matrix
• LP-860: Evidence Locker Index

Impact Series

• LP-900: Impact Framework & Theory of Change
• LP-901: Impact Measurement Methodology
• LP-930: Financial Inclusion Metrics

One-Paragraph Summary

Lux Vision Fund invests only in ESG-aligned opportunities. Environmental integrity is measured against baselines and verified over time; social benefit is defined by economic mobility, access, and resilience; and governance is enforced through on-chain auditability with privacy-preserving controls. Lux provides capital and financial rails, Hanzo builds and verifies high-impact technology, Zoo anchors life-first mission and ethics, and our DAOs steward community ownership of IP so long-tail value accrues to contributors and communities. The result is a thoughtfully designed flywheel where transparency builds trust, trust attracts capital, and capital scales verified outcomes.

Specification

This LP serves as a meta-framework defining investment policies. The specification is embodied in:

1. Core Values (Section above) - Non-negotiable principles
2. ESG Pillars - Environmental, Social, and Governance definitions
3. Investment Process - Five-stage workflow from intake to scale
4. Enforcement Mechanisms - Outcome-gated capital, claims registry, verification

Detailed specifications for each pillar are defined in subsidiary LPs (LP-751, LP-752, LP-753).

Rationale

The framework design reflects several key decisions:

1. Tranched capital over lump-sum - Reduces risk of misuse and creates accountability checkpoints
2. Claims registry with evidence hashes - Enables third-party verification without exposing sensitive data
3. Privacy-preserving verification - Balances transparency with data protection using ZK proofs
4. Ecosystem role separation - Clear boundaries prevent conflicts of interest and enable specialization
5. Binding covenants over voluntary guidelines - Legal enforcement mechanisms complement on-chain accountability

Backwards Compatibility

This LP establishes a new framework and does not modify existing investment structures. Existing investments may be evaluated against this framework but are not retroactively bound by it.

Security Considerations

1. Evidence tampering - Mitigated through immutable on-chain hashes and third-party attestations
2. Verifier collusion - Multiple independent verifiers required for material claims
3. Privacy leakage - ZK proofs and aggregated statistics prevent individual data exposure
4. Governance capture - DAO voting mechanisms include anti-concentration measures

Test Cases

As a Meta LP, formal test cases are not applicable. Framework validation is demonstrated through:

1. Successful application to pilot investments
2. Third-party audit of claims registry integrity
3. LP and stakeholder satisfaction surveys
4. Regulatory compliance assessments

Changelog

Version	Date	Changes
1.0	2025-12-17	Initial draft

Copyright

Copyright and related rights waived via CC0.