C-Quest Capital Uncovers Wrongdoing by Former CEO Kenneth Newcombe; Takes Decisive Action to Help Company Fulfill its Critical Mission

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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