The thing about glitter is, that it is often the waste from other processes cut up finely. You need those processes to use environmentally safe sheets of shiny paper.

There is.

For 15 times the price

one quick DDG search, first result: https://thegoodglitter.com/

I find their suggestions for DIY glitter questionable, and I couldn't tell you if all the article's information is accurate, but Sustainable Jungle's evaluation of current biodegradable glitters is worth a read, if you're interested in glitter formulas.

Tl;dr There is active research into cellulose nanocrystals for glitter, which would still have some ecologically negative impacts, but otherwise everything on the market is likely greenwashing, to various degrees.

Edible glitter already exists. I'd have to imagine that it is also biodegradable.

I'd be surprised if there is, seeing as glitter is made from plastic and aluminium

It's also apparently used in certain types of kitchen surfaces (quartz or granite if i'm not mistaken) to give them a sparkly finish, not too sure people would be happy to find their kitchen surfaces shine "biodegraded" and looking duller after half a century lol