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The leather industry generates approximately ten million tons of solid bio-wastes that can be used to synthesize various multifunctional materials with exciting properties. One such approach involves developing advanced hybrid materials, which is considered one of the key areas but the underdeveloped materials science discipline. This work explored methods to use collagen derived from leather industry bio-wastes to form hybrid films via two different ways: to produce luminescent carbon dots (Cdots) and develop hybrid films. The polymeric collagen was mixed with Cdots and reduced graphene oxide (rGO) to create flexible composite films that exhibit improved thermal, mechanical, electrical, and luminescent properties. The Cdot films displayed enhanced luminescence. The Kubelka-Munk transformation of the diffuse reflectance reveals a massive increase in absorbance in the visible light region with the addition of rGO. Besides, the developed films displayed electrical conductivity and weak ferromagnetic characteristics and showed enhanced biocompatibility. These findings highlight new avenues for converting industrial bio-wastes into useful multifunctional materials in scalable and inexpensive ways, thereby diminishing environmental pollution and enhancing environmental sustainability.