More research is being conducted on the substantial environmental impacts of industrial packaging systems, including the depletion of material resources, greenhouse gas emissions, and the buildup of post-consumer waste. Growing worldwide supply chains and stricter sustainability regulations have raised the demand for environmentally friendly packaging options. This study critically examines the environmental impact of industrial packaging by integrating the most recent improvements in life cycle assessment (LCA) methodologies, ecological footprint (EF) assessments, material advancements, and circular economy models. The evaluation assesses the sustainability performance of both conventional and alternative packaging materials, including plastics, aluminum, corrugated cardboard, and polylactic acid (PLA). The findings demonstrate that, although renewable, corrugated cardboard still carries a notable environmental footprint, installing solar energy systems can reduce this footprint by more than 12%. When manufactured from renewable feedstocks and properly composted, PLA-based trays have potential effective environmental performance. There are still major challenges in spite of these developments. Ecological overshoot in industrial zones, where EF may exceed high biocapacity, waste disposal infrastructure shortcomings, and economic trade-offs are some of these. Transportation-related pollutants and the limited scalability of bio-based materials further impede widespread adoption. Studies suggest that employing sustainable industrial packaging could alter supply chain practices and reduce environmental impacts. To achieve this promise, cross-sector collaboration, standardized policy frameworks, and the integration of advanced environmental standards into packaging design and decision-making are required.