Recent study examines the creation and characterization of environmentally sustainable insulating panels utilizing waste materials from the leather and footwear sectors. The present study sought to develop sustainable panels by integrating leather scraps with footwear scraps, crumb rubber, and polyurethane (PU) modified with methylene diphenyl diisocyanate (MDI), thereby minimizing industrial waste. Six unique sample formulations were created, using different ratios of leather scrap, footwear scrap, and crumb rubber. The compositions changed from DIP-01 to DIP-06, maintaining leather scrap at 100%, while footwear scrap fluctuated between 20 and 40%, crumb rubber from 0 to 20%, and PU/MDI was consistently set at 50% of the leather scrap weight. The mechanical, thermal, and acoustic characteristics of these panels were methodically assessed. Mechanical assessments quantified compressive strength, flexural strength, and tensile strength, demonstrating enhanced structural integrity and resilience, especially with the use of crumb rubber. Thermal conductivity experiments were conducted to evaluate the insulation effectiveness of the panels, illustrating their efficacy in reducing heat transmission. Furthermore, the acoustic performance was assessed by examining the panels’ noise absorption and sound attenuation properties. The findings validated that the incorporation of footwear waste and crumb rubber into the panels did not detract from thermal or acoustic performance, but markedly improved mechanical qualities. These findings underscore the possibility of using waste from the leather and footwear industries in construction materials, therefore advancing sustainable building techniques. The use of industrial waste provides a cost-efficient option while simultaneously supporting environmental objectives by minimizing waste and fostering the circular economy. The present research highlights the feasibility of converting industrial by-products into high-performance, sustainable insulating materials, providing significant insights for the building sector.