Special Committee of Non-Executive Directors
Commissioned Review by Global Law Firm That Determined Mr. Newcombe
Committed Wrongdoing That Resulted in Significant Over-Issuance of
Carbon Credits to C-Quest
New Leadership Team Reported Wrongdoing to U.S.
Authorities and Over-Crediting to Verra to Facilitate the
Cancellation of Millions of Over-Issued Carbon Credits
Will Help to Ensure No Customer Impact by
Making All Credit Cancellations from Inventory
Introduces New Processes, Policies, and
Controls to Conduct Future Activities with a Focus on Quality,
Integrity, and Transparency
Reorganizes Operations to Help Company Continue
its Mission of Empowering Rural Communities to Address Climate
Change and Drive Sustainable Development
Strongly Believes Transparent Voluntary Carbon
Markets Will Continue to be an Important Part of the Solution to
the Climate Crisis
C-Quest Capital LLC (“C-Quest” or the “Company”), a global
carbon project developer with a mission of empowering rural
communities to address climate change and drive sustainable
development, today announced that it uncovered wrongdoing by its
former Chief Executive Officer, Kenneth Newcombe, which resulted in
the over-issuance of millions of carbon credits to the Company in
connection with its clean cooking programs registered with the
carbon credit registry Verra. C-Quest’s new leadership team
voluntarily reported the wrongdoing to U.S. federal law
enforcement, regulators, and Verra.
Under the new leadership team – overseen by Chief Executive
Officer Jules Kortenhorst and committed to operating the Company
with a focus on quality, integrity, and transparency – C-Quest is
voluntarily facilitating the cancellation of any over-issued
credits from its inventory in Verra; adopting new measurement,
reporting, and verification (MRV) processes, crediting
methodologies, and policies to ensure its future activities meet
the highest ethical standards; and reorganizing its operations to
help the Company fulfill its critical mission over the long
term.
Mr. Kortenhorst said, “I have proudly dedicated the last two
decades of my career to the essential task of combating climate
change. I stepped into my role at C-Quest because I deeply believe
in the global carbon markets and C-Quest’s ability to help lead
their reform. High-integrity voluntary carbon markets, underpinned
by robust standards for issuance of quality carbon credits, can
accelerate emissions reductions, support economic development, and
improve the lives of some of the most underserved rural communities
worldwide. To date, C-Quest has installed clean cooking systems in
millions of households across ten countries in Africa and Southeast
Asia, and we are committed to continuing to serve as an important
conduit of climate finance to the Global South.”
Mr. Kortenhorst continued: “As CEO, my goal is to transform the
Company by establishing a new culture of quality, integrity, and
transparency that will help to address the wrongdoing we uncovered,
catalyze a broader transformation of the carbon markets, and allow
C-Quest to fulfill its mission. Our swift and decisive actions
demonstrate that market participants can play a significant role in
improving our industry, abating global emissions, and contributing
to sustainable development goals.”
Internal Discovery, Global Law Firm Review, and Leadership
Change
In early 2024, a Special Committee of non-executive directors of
C-Quest’s Board of Directors commissioned a global law firm to
conduct a review of C-Quest’s operations and help inform potential
corrective actions. This review uncovered issues with the Company’s
operations that resulted from Mr. Newcombe’s wrongdoing.
As part of its remedial measures, C-Quest appointed Jules
Kortenhorst as CEO in early February 2024. Mr. Kortenhorst has
served as a director of C-Quest since 2023 and is a member of the
Special Committee. Mr. Kortenhorst recognized the opportunity to
transform the business and drive improvements across the industry.
He is the former CEO of RMI and the European Climate Foundation and
a recognized leader on global energy issues and climate change. The
Company has also appointed a new Chief Operating Officer, Chief
Transformation Officer, General Counsel, and Director of
Compliance.
Mr. Newcombe has not been involved in the management of C-Quest
since Mr. Kortenhorst’s appointment. The Company has also
terminated several other senior executive leaders and employees
related to the matter.
Voluntary Reporting of Wrongdoing to U.S. Authorities and
Over-Crediting to Verra
C-Quest’s new leadership team voluntarily reported the review’s
findings to U.S. federal law enforcement, regulators, and Verra.
C-Quest expects Verra to launch its own independent review of the
matter soon, and will work constructively with the registry to
facilitate the cancellation of millions of credits that C-Quest
believes were over-issued. In the interim, C-Quest has transferred
credits assumed to be affected to separate accounts, which will
enable the Company to cancel or retire any affected credits for no
compensation upon the completion of Verra’s review. C-Quest’s new
leadership team has also voluntarily suspended the sale of issued
credits from its affected cookstove projects.
To seek to ensure the over-crediting does not impact any C-Quest
customers, the Company will be making all necessary credit
cancellations from inventory. C-Quest believes that all credits
that customers have purchased from C-Quest are validly issued,
verified credits that represent the appropriate carbon savings from
cookstove installations in rural households.
Adopts Improved Processes, Methodologies and Policies, and
Reorganizes Operations
C-Quest is also adopting improved MRV processes, operations, and
policies to mark a clean break from past practices and to help
position the Company to operate with a clear focus on quality,
integrity, and transparency.
To that end, since new leadership was installed in February
2024, C-Quest has:
- Implemented a new organizational structure with clear lines of
authority across the business, which include safeguards to prevent
others from repeating Mr. Newcombe’s actions.
- Retained third-party experts to train all executives and staff
on the Company’s new values and its new standards for quality,
integrity and transparency.
- Improved internal operations to better calibrate the
performance of C-Quest’s stove fleet through the Company’s enhanced
Stove Champion program and more rigorous thermal sensor
processes.
- Adopted a more stringent measurement process, also known as a
95/5 confidence interval approach, for determining the appropriate
number of samples for C-Quest’s periodic MRV process.
- Shifted towards incorporating measurement processes, referred
to as the Kitchen Performance Tests, rather than estimation
processes for calculating the carbon impacts of its stove
fleet.
- Chartered its internal Integrity Committee to review and
quantify carbon crediting issues and retained external legal
counsel to review its work.
- Appointed a Director of Compliance to implement the Company’s
integrity safeguards and procedures.
- Endorsed The Principles for Responsible Carbon Finance in Clean
Cooking and the adoption of these principles across the carbon
crediting industry.
Furthermore, C-Quest intends to:
- Adopt a new, more robust carbon crediting methodology and work
with registries and the Integrity Council for the Voluntary Carbon
Market (ICVCM) to secure a Core Carbon Principles label for this
new methodology.
- Evaluate ways to improve its products, particularly for rural
communities, and enhance the integrity, accuracy and transparency
of the Company’s methods for measuring carbon impact for decades to
come.
Additionally, to align C-Quest’s current operations with its
efforts to improve its MRV processes, methodologies, and policies,
C-Quest is reducing the number of deployed cookstoves in its fleet
by nearly 175,000 to reflect the number of cookstoves it believes
are no longer in use or have fallen into disrepair. The Company is
also reorganizing and refocusing its operations by right-sizing the
business through a reduction in its workforce and eliminating
projects in certain geographies.
Mr. Kortenhorst concluded: “The global carbon markets are
evolving and maturing. We believe a more cohesive, well-regulated
carbon market will be essential to solving the climate crisis. We
are deeply convinced that C-Quest has the ability to contribute to
addressing climate change, and we believe the meaningful changes we
are undertaking will create a stronger company positioned to help
reduce industry opacity and build trust across the voluntary carbon
markets for the benefit of our stakeholders, the communities we
serve, and the industry at large.”
About C-Quest Capital
C-Quest Capital is a carbon project developer with a mission of
empowering rural communities to address climate change and drive
sustainable development. We are committed to catalyzing a sustained
transition to a climate resilient future for communities whose
well-being are most at risk from climate change. Our ambition is to
use carbon finance to achieve a long-term transition to more
sustainable alternatives at scale. To learn more, visit
www.cquestcapital.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240626851324/en/
Media: Amanda Shpiner/Mark Semer Gasthalter & Co. (212)
257-4170 CQC@gasthalter.com