LP-751: Environmental Integrity Investment Policy

Abstract

Lux Vision Fund treats environmental integrity as a baseline requirement for every investment. We prioritize projects that reduce net harm and/or create net-positive restoration relative to a defined baseline, and we commit to measuring outcomes over time—not just at launch.

Principle: Measurable improvement, not vibes.

Motivation

Environmental claims in investment are often vague, unverifiable, or outright misleading. Many funds claim "green" or "sustainable" investments without rigorous baselines, materiality assessments, or ongoing verification. This undermines trust and dilutes the impact of genuine environmental investments.

This policy establishes:

1. Mandatory baselines - No investment without clear before/after comparison framework
2. Materiality focus - Track only metrics that matter for each project type
3. Continuous verification - Annual reporting with third-party audits for material claims
4. Anti-greenwashing - No public claims without verifiable evidence

What Qualifies as "E-Aligned"

1. Baseline First

Every project defines what the world looks like without it:

Baseline Element	Requirement
Energy use	Current state and trajectory
Emissions	GHG footprint (Scope 1, 2, 3 where material)
Materials	Resource consumption patterns
Land/water impacts	Geographic and hydrological effects
Biodiversity pressures	Species and ecosystem impacts

No baseline = no investment.

2. Materiality

We track only the few environmental variables that actually matter for that project.

Project Type	Material Variables
AI/Compute	Energy intensity, carbon intensity, hardware lifecycle
Fintech	Operational footprint, enabled emissions (Scope 3)
Physical goods	Materials, manufacturing, transport, end-of-life
Nature-based	Biodiversity, carbon sequestration, water
Infrastructure	Construction, operations, resilience

Too many metrics = no accountability. Focus on what moves the needle.

3. Lifecycle Thinking

We consider environmental impact across the full lifecycle:

Supply Chain → Manufacturing → Operations → Use Phase → End-of-Life
      ↑              ↑             ↑            ↑            ↑
   Material     Embodied      Operational   Customer    Disposal/
   sourcing      carbon         energy        impact     recycling

Not every project tracks every phase—but every project identifies which phases matter.

4. Verification

Environmental claims require:

Requirement	Standard
KPIs	Quantified, time-bound metrics
Data sources	Named, accessible, auditable
Methodology	Documented calculation approach
Verifier attestation	Third-party or auditable self-verification

No verification = no claim.

KPI Framework

Standard Environmental KPIs

Choose what's relevant per deal:

Energy Intensity

Metric	Unit	Use Case
Energy per output	kWh/unit	Manufacturing, compute
Energy per revenue	kWh/$1M revenue	General business
PUE	Ratio	Data centers

Carbon Intensity

Metric	Unit	Use Case
Scope 1 emissions	tCO2e	Direct operations
Scope 2 emissions	tCO2e	Purchased energy
Scope 3 emissions	tCO2e	Value chain (where material)
Carbon per unit	kgCO2e/unit	Product carbon footprint
Reduction vs baseline	%	Progress tracking

Water

Metric	Unit	Use Case
Water use	m³	Total consumption
Water intensity	m³/unit	Per-output efficiency
Discharge quality	mg/L by pollutant	Effluent standards
WUE	L/kWh	Data center water use

Materials & Circularity

Metric	Unit	Use Case
Recycled content	% by mass	Input circularity
Recyclability	% by mass	Output circularity
Waste diverted	tonnes	Landfill avoidance
Hazardous waste	tonnes	Toxic materials

Biodiversity & Nature

Metric	Unit	Use Case
Habitat protected	hectares	Conservation
Habitat restored	hectares	Restoration
Species benefit	count	Biodiversity projects
Deforestation avoided	hectares	Forest protection

Compute Efficiency (AI/Tech)

Metric	Unit	Use Case
Training energy	kWh/model	Model development
Inference energy	Wh/1K tokens	Production serving
CO2e per task	gCO2e	Carbon efficiency
Efficiency improvement	% vs baseline	Progress tracking

Eligibility Criteria

Minimum Requirements

Criterion	Requirement
Baseline defined	Clear counterfactual established
Material KPIs identified	2-5 KPIs that matter
Measurement plan	How data will be collected
Targets set	Quantified, time-bound goals
Verification approach	How claims will be verified

Preferred Characteristics

Characteristic	Scoring Bonus
Net-positive impact	Creates environmental benefit beyond neutral
Science-based targets	Aligned with SBTi or equivalent
Third-party certification	B Corp, ISO 14001, etc.
Circular design	Products designed for circularity
Nature-based solutions	Leverages natural systems

Red Flags (Requires Deep Diligence)

Flag	Concern
High-emission baseline	May be improving from bad starting point
Offset-dependent	Relies on offsets vs. real reduction
Unverifiable claims	Can't demonstrate outcomes
Scope 3 blind spots	Ignores material value chain impacts

Enforcement

Outcome-Gated Releases

Capital is deployed in tranches tied to verified environmental milestones:

Tranche	Trigger
Initial (30%)	Baseline verified, measurement system operational
Progress (40%)	Mid-term milestone verified
Completion (30%)	End-of-period targets achieved

Claims Registry

Every environmental claim is logged:

claim_id: "E-2025-001"
project: "Project Alpha"
claim: "50% reduction in carbon intensity vs 2024 baseline"
baseline_value: 100 kgCO2e/unit
current_value: 50 kgCO2e/unit
data_source: "Internal metering + utility bills"
methodology: "GHG Protocol Corporate Standard"
verifier: "Third-Party Auditor Inc."
evidence_hash: "QmXxxxx..."
date: "2025-12-01"

No-Greenwashing Rule

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

Claim Type	Marketing Allowed?
Verified, quantified	✅ Yes
Estimated, methodology disclosed	⚠️ With caveats
Aspirational, no data	❌ No
Vague ("eco-friendly")	❌ Never

Consequences

Situation	Action
Milestone missed	Tranche withheld until remediation
Unverifiable claim	Claim retracted, marketing stopped
Material misrepresentation	Investment review, potential termination
Persistent non-compliance	Exit from portfolio

Reporting Requirements

Quarterly Updates

Element	Requirement
KPI dashboard	Current vs. target for all material KPIs
Trend analysis	Direction of travel
Issues flagged	Any measurement or performance concerns

Annual Deep Report

Section	Contents
Methodology review	Any changes to measurement approach
Year-over-year comparison	Progress against baseline
Third-party verification	Audit results (for material claims)
Improvement plan	Next year's priorities

Public Disclosure

Disclosure	Location
Portfolio carbon footprint	Annual fund report
Project-level performance	Project pages (with consent)
Claims registry	Public registry (aggregate)

Related LPs

• LP-750: Lux Vision Fund ESG Investment Framework
• LP-752: Social Benefit Investment Policy
• LP-753: Governance & Ecosystem Architecture
• LP-800: ESG Principles and Commitments
• LP-801: Carbon Accounting Methodology
• LP-840: Impact Disclosure & Anti-Greenwashing Policy

Changelog

Version	Date	Changes
1.0	2025-12-17	Initial draft

Copyright

Copyright and related rights waived via CC0.