Skip to main content

Shareconomy – a path to sustainability

Posted on October 29, 2018

Efthymia Eleftheriadou
Efthymia Eleftheriadou
Associate, Research Products

This blog originally appeared on GES International’s website and has been republished following Sustainaltyics’ acquisition of the company on 9 January 2019. See the press release for more information.

‘The average power drill is used around 12 to 15 minutes over its lifetime’, is a phrase that is very often cited by people who want to discuss the benefits of the sharing economy – shareconomy. The question of the underutilisation of an asset (for example, the above-mentioned drill) or a skill is fundamental in this discussion. From people who rent their spare rooms (e.g. Airbnb), to those who can help with home repairs (e.g. TaskRabbit) in exchange for money, a sharing economy has become a breeding ground for social entrepreneurship, powered by new informational technologies.

The sharing business model has a role to play in the closed loop of a circular economy by extending the amount of time a product is in use while maximizing its utilisation. It decreases resource consumption and at the same time, increases access to resources and services, allowing for the emergence of social groups and the creation of economic opportunities. It builds trust among users, who give their feedback on their experience through review systems. It creates efficiency in the market by instantly connecting the consumer with the producer. This new model has had such a great impact that it has disrupted traditional businesses and put a lot of pressure on industries like hospitality and transport. The value of the shareconomy today is estimated at around USD 250 billion and it is predicted to morph into a USD 2 trillion market in the near future. Such rapid growth can be appealing to investors. And although millennials (and younger generations) are, without a doubt, the largest cohorts in the sharing economy, all demographics are increasingly getting into sharing companies.

This new business model has a feel-good aspect attached to it, but not everything is as bright as it might seem. A lack of regulation, tax avoidance, liability issues and an erosion of labour rights are just some of the shortcomings of the sharing economy. Its critics also strongly oppose the name, calling it a euphemism for a desperate economy, suggesting that a renting economy would be a more suitable term to describe the phenomenon. This model cuts out the middlemen, which means it reduces transaction costs, therefore making the shared services cheaper, faster and easier to access through online platforms. A discussion with any user will reveal that it is the economic benefits and flexibility that mostly drive people to use such services, rather than, for example, their concern to reduce their carbon footprints (BlaBlaCar).

It looks like the sharing economy will keep growing but its social and environmental impact is not yet clear. This new economic activity has great potential. It promises the empowerment of ordinary people and a more sustainable future by making better use of our limited resources and therefore minimising waste. People have the right to monetise their assets but without engaging in business practices that may endanger consumer safety. The next challenge for the shareconomy will be to democratise the ownership and governance of online platforms.

Recent Content

Waterfall in the rain forest

A Holistic and Decision-Useful Approach to Assessing Nature-Related Risks and Opportunities

Proposing a holistic, decision-useful approach to company-level assessments of nature-related risks.

Wind turbines in front of a mountainous background

Q&A | A Conversation on Aligning Investments With Climate Goals

A Q&A about investor engagements, company commitments and climate data.

2025 Global Sustainable Investment Data and Research Survey | Morningstar Sustainalytics

Your Insights Needed: The 2025 Global Sustainable Investment Data and Research Survey

The 2025 Global Sustainable Investment Data and Research Survey is seeking the input of Institutional Investors, Asset Managers, Asset Owners, and Banks. The questionnaire takes approximately 10 – 12 minutes to complete.

ESMA Fund Naming Guidelines Early Insights Into Renaming Activity and Portfolio Impact | Morningstar Sustainalytics

ESMA Fund Naming Guidelines: Early Insights Into Rebranding Activity and Portfolio Impact

This article looks at how the universe of open-end and exchange-traded funds in scope of the ESMA fund naming guidelines has changed since their introduction in May 2024, through analysis of rebranding activity and assessed the impact of the requirements.