LP-800: ESG Principles and Commitments

Abstract

This LP establishes the foundational Environmental, Social, and Governance (ESG) framework for Lux Network. It defines our material topics structure, metrics and targets, verification approach, and known tradeoffs. All other ESG-related LPs (LP-801 through LP-999) reference this document as the canonical source for Lux's sustainability commitments.

Motivation

Blockchain networks face increasing scrutiny over their environmental and social impact. Without a clear ESG framework, networks risk:

1. Reputational damage from perceived environmental harm
2. Regulatory challenges as sustainability requirements expand globally
3. Institutional exclusion from ESG-mandated investment portfolios
4. Community erosion as stakeholders demand accountability

This LP addresses these challenges by establishing clear commitments, measurable targets, and transparent governance structures. It positions Lux Network as infrastructure that accelerates—rather than hinders—the transition to a sustainable economy.

Mission and ESG Thesis

Lux Network is committed to building blockchain infrastructure that serves humanity and the planet. We believe decentralized systems should accelerate the transition to a sustainable economy, not hinder it. Our ESG thesis: infrastructure-level sustainability creates compounding positive impact because every application built on Lux inherits our environmental and social commitments.

Material Topics

We are accountable for the following material ESG topics, prioritized by impact and stakeholder relevance:

Environmental

Topic	Materiality	Boundary	Metrics
Energy consumption	High	Validator network, data centers	kWh/tx, PUE
Carbon emissions	High	Scope 1, 2, 3	tCO2e/year
E-waste	Medium	Hardware lifecycle	kg recycled/year
Renewable energy	High	Network-wide	% renewable

Social

Topic	Materiality	Boundary	Metrics
Financial inclusion	High	Global access	Unique addresses, geo-distribution
Developer community	High	Ecosystem growth	Active developers, grants disbursed
Transparency	High	All operations	Disclosure score
User protection	High	DeFi applications	Insurance coverage, audit rate

Governance

Topic	Materiality	Boundary	Metrics
Decentralization	Critical	Network control	Nakamoto coefficient, validator distribution
Token governance	High	Protocol decisions	Participation rate, proposal throughput
Regulatory compliance	High	Multi-jurisdiction	Licenses held, enforcement actions
Third-party risk	Medium	Vendors, partners	Vendor ESG scores

Governance Structure

ESG Ownership

Role	Responsibility	Accountability
ESG Committee	Strategic direction, policy approval	Board-level reporting
Sustainability Lead	Day-to-day execution, reporting	ESG Committee
Working Groups	Topic-specific implementation	Sustainability Lead
External Advisors	Independent review, benchmarking	ESG Committee

Decision Rights

• Policy Changes: ESG Committee approval, community vote for material changes
• Target Setting: Annual review with public consultation
• Incident Response: Sustainability Lead with 24-hour escalation to Committee
• Disclosure: Quarterly reports, annual audit

Metrics and Targets

Environmental Targets

Metric	Baseline (2024)	2025 Target	2027 Target	2030 Target
Carbon intensity (gCO2/tx)	TBD	-20%	-50%	Net-zero
Renewable energy (%)	TBD	50%	80%	100%
Energy efficiency (tx/kWh)	TBD	+30%	+60%	+100%

Social Targets

Metric	Baseline (2024)	2025 Target	2027 Target
Geographic distribution (countries)	TBD	50+	100+
Developer grants ($)	TBD	$5M	$20M
Ecosystem audits (%)	TBD	80%	95%

Governance Targets

Metric	Baseline (2024)	2025 Target	2027 Target
Nakamoto coefficient	TBD	20+	50+
Governance participation (%)	TBD	30%	50%
LP approval rate (%)	TBD	Track	Track

Verification and Assurance

Internal Controls

1. Automated Monitoring: On-chain metrics tracked in real-time
2. Manual Review: Quarterly reconciliation of off-chain data
3. Cross-Functional Audit: Annual internal audit by independent team

External Verification

Type	Frequency	Standard	Provider
Carbon accounting	Annual	GHG Protocol	TBD (qualified auditor)
ESG disclosure	Annual	GRI Standards	TBD
Security audit	Continuous	Custom	Multiple (rotation)
Financial audit	Annual	GAAP/IFRS	TBD

Third-Party Attestations

• SOC 2 Type II: Target 2025 (infrastructure controls)
• ISO 14001: Target 2026 (environmental management)
• ISO 27001: Target 2025 (information security)

Known Tradeoffs

We are transparent about tensions in our ESG approach:

Performance vs. Sustainability

• Tradeoff: Sub-second finality requires always-on validators
• Mitigation: Energy-efficient consensus (Quasar), renewable energy requirements
• Disclosure: We will report energy cost per transaction honestly

Decentralization vs. Efficiency

• Tradeoff: More validators = more resilience but more energy
• Mitigation: Minimum viable validator set with geographic distribution requirements
• Disclosure: We optimize for decentralization first, then efficiency

Privacy vs. Transparency

• Tradeoff: Some ESG data involves confidential business relationships
• Mitigation: Aggregate reporting, third-party attestation without raw data
• Disclosure: We will explain what we can't disclose and why

Speed vs. Thoroughness

• Tradeoff: Rapid protocol evolution may outpace ESG review
• Mitigation: ESG checkpoint in LP approval process
• Disclosure: We will flag LPs that have incomplete ESG analysis

Compliance and Enforcement

Self-Enforcement

• All core contributors commit to ESG training
• ESG considerations required in LP submissions
• Quarterly ESG scorecard for protocol health

Ecosystem Enforcement

• Major ecosystem grants require ESG attestation
• Validator selection criteria include sustainability metrics
• DeFi protocol listing guidelines include security/audit requirements

Escalation Path

1. Informal: Working group discussion
2. Formal: ESG Committee review
3. Public: Community governance vote
4. External: Regulatory notification (if required)

Related LPs

• LP-801: Carbon Accounting Methodology
• LP-810: Green Compute & Energy Procurement
• LP-820: Network Energy Transparency
• LP-830: ESG Risk Management
• LP-840: Impact Disclosure & Anti-Greenwashing Policy
• LP-850: Standards Alignment Matrix
• LP-860: Evidence Locker Index

Changelog

Version	Date	Changes
1.0	2025-12-16	Initial draft

Copyright

Copyright and related rights waived via CC0.