Chapter 13: Green Promises and Platform Realities: Regulatory Responses to Greenwashing in the Sharing Economy

The sharing economy, powered by digital platforms like Airbnb and Uber, has reshaped how goods and services are accessed, exchanged, and monetized. While these models are often marketed as environmentally sustainable, empirical research increasingly questions the validity of such claims. This chapter critically explores the concepts of greenwashing and eco-illusion within the sharing economy, emphasizing the gap between platform narratives and actual environmental outcomes. Greenwashing—originally rooted in false advertising—has evolved into a sophisticated strategy embedded in corporate governance and sustainability disclosures, often supported by selective data and misleading ESG metrics. Eco-illusion, in contrast, extends this critique by highlighting the systemic reinforcement of false sustainability perceptions by firms, regulators, and consumers alike.

Drawing on case studies and empirical data, the chapter evaluates how platform businesses strategically use sustainability frameworks, such as the Circular Economy (CE), Environmental, Social, and Governance (ESG) standards, and the United Nations Sustainable Development Goals (SDGs), to construct appealing but often misleading narratives. It also examines the rebound effects and systemic trade-offs obscured by these claims, such as increased emissions from tourism or overuse of shared vehicles. Further, it analyzes emerging regulatory responses, focusing on the European Union’s proposed Green Claims Directive (GCD) and similar initiatives in the United States and national jurisdictions. These frameworks aim to counter unsubstantiated environmental claims through third-party verification and scientific substantiation.

Ultimately, the chapter underscores the need for robust regulation and critical policy discourse to ensure accountability in the sharing economy. Without meaningful oversight, greenwashing and eco-illusion risk misleading consumers and distorting sustainable market competition.