In the context of accelerating technological progress and the rise of artificial intelligence (AI), the role of designers as creative thinkers and generators of innovative ideas is increasingly being questioned. This research highlights the pedagogical strategies that encourage university design students to critically and empathetically engage with materials and processes from various perspectives. The object of this study was the results of the upcycling and speculative design projects developed by first and third-year design students at the Vila Nova de Famalicão campus of Universidade Lusíada while fostering sustainable innovation. Those approaches involved problem finding or problem identification and emphasized co-creation, empathy, experimentation, and iteration with local craft processes. This reality motivated another objective: to promote interdisciplinary collaboration by increasing the university's involvement with industry and local communities to respect diversity of thought. The new value propositions were created through one or more strategies: new products, new combinations of several existing products, updating/replacing one or more materials, a new function, or a multifunction of one of the existing products. The findings reveal the potential of design education to encourage sustainable rethinking of materials and artefacts. By bridging speculative design and upcycling practices, this case study argues for a redefinition of the role of the designer in a rapidly changing technological and environmental landscape. The focus on materials and their life cycle is a crucial part of the vision of a sustainable future that considers the health of people, animals and the planet.