The launch of the Cali Fund at COP16 marked a new international framework for sharing benefits from Digital Sequence Information (DSI). But while the broad architecture of the Fund has been agreed much remains uncertain for businesses, especially SMEs navigating this evolving landscape.
At a recent webinar hosted by the BioIndustry Association (BIA), speakers from DEFRA and Covington outlined the current state of play. Here are the key takeaways for companies working with DSI, and some early steps they can take.
WHAT IS THE CALI FUND?
The Cali Fund is a new multilateral mechanism, established under the UN Convention on Biological Diversity (CBD), aimed at ensuring the fair and equitable sharing of benefits derived from the use of DSI — which includes DNA, RNA, and potentially proteins and even metabolites derived from non-human organisms.
Under this model, companies that “benefit directly or indirectly” from DSI are invited (but not legally required – yet) to make payments to the Fund. In return, they receive a certificate and receipt. The suggested contribution and current company thresholds are set out as below:
Having regard to paragraph 13, entities that, on their balance sheet dates, exceed at least two out of three of thresholds (namely, total assets: 20 million United States dollars, sales: 50 million dollars, and profit: 5 million dollars) averaged over the preceding three years should contribute to the global fund 1 per cent of their profits or 0.1 per cent of their revenue, as an indicative rate.
Assets and sales as used above refer to total assets and sales – not just those that relate to the use of DSI.
Funds will be distributed as follows:
- 50% to developing countries for biodiversity initiatives.
- 50% directly to Indigenous Peoples and Local Communities (IPLCs), to support implementation of the Global Biodiversity Framework.
KEY POINTS FOR BUSINESSES
- Voluntary for now, but watch this space
The current framework is an invitation, not an obligation, and currently applies to larger companies that meet at least 2 of 3 financial thresholds for company assets, sales, and profit. But this may evolve — COP17 (expected in 2026) could expand the scope, potentially including SMEs or introducing stricter compliance mechanisms.
- No legal certainty (yet)
One major issue is the risk of obligation stacking. Many countries (e.g., Brazil, South Africa, India) have their own Access and Benefit Sharing (ABS) regimes, which require companies to pay a defined amount to countries from which biological material, including digital sequence information, is obtained. It’s currently unclear whether contributing to the Cali Fund will exempt companies from local requirements. However, a new initiative — Friends of the Cali Fund (which to date includes the UK, Chile, and Germany among an expanding list of countries) — aims to address this, advocating for a “pay once, comply everywhere” principle.
- DSI is broad and undefined
There is currently no agreed definition of what constitutes DSI. Draft groupings include:
- Group 1: DNA/RNA
- Group 2: Proteins
- Group 3: Metabolites
Some proposals also extend to structural and other higher-order information relating to the above groups. So, until a finalised definition is reached, it will be hard to know whether your company’s use of biological data creates a potential obligation to the Cali Fund.
- Global, sector-agnostic scope
There are no geographic or sector limits on who can contribute. If your business uses DSI — even if hosted on a public database like GenBank — you could be considered a user, regardless of whether you’re based in a CBD signatory country.
- Payments are based on company size, not product-level DSI use
The draft model applies thresholds at the whole-company level. So if your company meets certain criteria (e.g., turnover, headcount) and uses DSI in any way, the expectation to contribute could apply.
UNRESOLVED QUESTIONS
- Will payment to the Cali Fund provide legal certainty and exempt businesses from national ABS laws?
- What exactly counts as DSI — and how far downstream do obligations apply in a value chain? For example, do service providers to DSI users have any obligations?
- How can companies verify that Cali Fund contributions are used responsibly?
WHAT SHOULD SMES BE DOING NOW?
SMEs are not yet directly targeted — but that could change. Here’s what smaller companies should be thinking about:
- Audit your DSI use
Understand where and how your business uses DSI, and where your DSI comes from. Is it embedded in R&D workflows? Are you accessing sequences from public or private databases?
- Watch for COP17 developments
The next Conference of the Parties may introduce stricter rules or bring SMEs into scope. Stay connected to trade bodies like BIA and sector specialists.
- Start ESG conversations
Consider how voluntary contributions could tie into your broader sustainability or responsible innovation strategies. While there’s no formal recognition yet, being proactive could support access to green investment or public procurement schemes.
- Seek legal and IP advice early
Particularly if you operate in or export to jurisdictions with national ABS laws. Assess potential risks of obligation stacking — and look for opportunities to reduce exposure by aligning with the multilateral mechanism.
FINAL THOUGHTS
The introduction of the Cali Fund marks a major shift in global biodiversity governance — and opens new conversations about the value derived from nature in digital form. For now, the obligations remain uncertain. But businesses that act early — mapping their DSI use, assessing potential liabilities, and engaging with emerging policy discussions — will be better positioned to navigate what’s coming.
