For starters, it's important to dispel the myth that leather is a byproduct of the meat industry. In fact, the skin is often the most valuable part of an animal: pound for pound, a cow's hide is worth much more than its flesh. So it's actually more accurate to think of leather as a subsidy — not a byproduct — of the meat industry.
And that subsidy is getting bigger. Fueled by growing global demand for luxury leather goods, the leather industry is predicted to grow 5% CAGR between 2018 and 2022, reach a whopping $289 billion.  To keep up with demand, the industry will need to slaughter an estimated 430 million cows annually by 2025 (for comparison, that number was 290 million in 2016).  And that's just cows. Leather comes from all kinds of animals — pigs, goats, sheep, alligators, kangaroos, stingrays, ostriches — and, yes, dogs and cats. Because leather is not typically not labeled (nor regulated on a global scale) you never really know who you're wearing.
This growth is problematic both ethically and environmentally. As The Guardian points out, much of the leather industry takes place in developing countries — from Bangladesh and Ethiopia to Cambodia and Vietnam, "where, despite a backdrop of exploitation of animals and humans and the extraordinary level of pollution caused by unregulated tanneries and processors, the pressure is on to produce more." 
Ultimately, it's not a regulation issue though. Even the very best regulation can't effectively oversee what happens to livestock behind closed doors. This is an economic issue — and a cultural one. If consumers choose to reduce their leather consumption, production will gradually shrink. Fewer animals killed. Fewer people poisoned. Less environment damage. Win. Win. Win.
A DIGEST OF THE DAMAGE
Most leather comes from countries where animal welfare laws are either non-existent or not enforced. In India, a major supplier of global cows, a PETA investigation found that "workers break cows’ tails and rub chili peppers and tobacco into their eyes in order to force them to get up and walk after they collapse from exhaustion on the way to the slaughterhouse." 
But suffering isn't confined to developing countries. In the US, cows bred for leather frequently live in factory farming conditions with extreme overcrowding and deprivation. They often endure horrific abuse, including being skinned while still conscious. One of the most popular forms of leather used in luxury goods is taken from newborn or even unborn calves and lambs. If you think about the size of a newborn compared to its adult counterpart, you can begin to wrap your head around the the number of lives taken to feed demand for a slightly softer material.
And yes, for those wondering, dogs and cats are used in the global leather industry. Typically from China, that leather is exported around the world where consumers, unaware of the source, unknowingly fund the dog and cat skin and meat trade. 
If you're looking to learn more about the global leather industry's treatment of animals, Stella McCartney's video is highly informative. Be forewarned, it is incredibly difficult to watch.
Photo credit: Undark
The carcinogenic chemicals used to tan leather pollute the surrounding environment, greatly endangering both the workers and neighboring inhabitants. The primary threat is the dumping of waste containing leftover chromium and other hazardous compounds. This is commonplace in regions that lack strong environmental protection standards, which also happen to be the primary regions where leather is tanned, such as China, India, and Bangladesh. 
In 2017, the India Committee of the Netherlands (ICN), a human rights organization, reported on the immense dangers of the trade. According to the report, there are roughly 2.5 million workers in India's leather trade. The workers are paid poverty wages and suffer from chemical exposure and workplace accidents. “Accidents regularly occur with machine operators getting trapped, workers cleaning underground waste tanks suffocating from toxic fumes, or workers drowning in toxic sludge at the tannery premises." Workers often include children.
For those looking to learn more, Sean Gallagher at the Pulitzer Center released a mini-documentary, The Toxic Price of Leather, covering the destruction that the leather industry has had on both people and environment in India. Undark's exposé, Skin Deep: Feeding the Global Lust for Leather, is also a highly informative read.
Photo credit: Undark
Leather is the number one most environmentally problematic material used in the fashion industry and has a footprint three times bigger than that of synthetic leather. 
Animal skin is turned into finished leather with a variety of substances dangerous to humans and the environment, including mineral salts, formaldehyde, coal-tar derivatives, and a variety of oils, dyes, and finishes — some cyanide-based. Most leather is chrome-tanned — a chemical waste considered hazardous by the U.S. Environmental Protection Agency (EPA). The waste from tanneries also includes protein, hair, salt, lime sludge, sulfides, and acids. 
Furthermore, much like the beef industry, the leather industry utilizes enormous amounts of water and generates large volumes of landfill waste. One unfortunate side effect is water pollution, particularly in countries where water safety isn't well regulated.
Deforestation is yet another impact, as forests are often destroyed to make room for large scale cattle farms. In a 2009 Greenpeace report, Slaughtering the Amazon, researchers determined that the Brazilian cattle industry (approximately 200 million cattle) was responsible for 14% of the world’s annual deforestation. 
“I'm hoping that in 10 years, people will look at the fact that we killed billions of animals and cut down millions of acres of rain forest, and [used] water in the most inefficient way and say, ‘Really? That’s what they did to make a pair of shoes?”
Stella McCartney, Interview with Vogue Magazine (2001)
 Techavio,"Global Leather Goods Market: 2018-2022,"July 2018.
 The Guardian, "Is it time to give up leather?" March 2016.
 PETA, "The Leather Industry."
 The Guardian, "Is your leather from China? It might be made of dog or cat skin," July 2016.
 Gizmodo, "How leather is slowly killing the people and places that make it," June 2014.
 Reuters, "Indian leather works risk health, life to make shoes for global market: report," March 2017.
 Global Fashion Agenda and Boston Consulting Group, "2017 Pulse of the Fashion Industry."