@Radin.Y - it's a good question as a lot of people see leather simply as a byproduct. However, it's not like the slaughterhouses are giving the cow hides to leather makers for free - it's a commercial product. This is my thoughts on the "green-ness" of this.
As has been stated cows are generally bad for the environment: they take up a lot of land, they consume a lot of food, especially in the US where corn seems to be the typical feed and growing that corn takes a lot of land. They also take a lot of water (both to consume directly and to grow all their feed) and produce a lot of methane which causes an order of magnitude more warming that the same volume of CO2.
Assume a farmer can sell a cow for £100. Perhaps £75 of that is for the meat, £10 is for the hide and £15 is for the rest (organs, blood, bones etc). If the market for leather stopped suddenly farmer has a shortfall of £10/10%. It is likely that they would keep asking for the same £100 per cow. This would then cause the price of the meat to increase which would likely be passed on to consumers (i.e. beef products cost more). This would likely lead to more people either buying less beef or switching to alternative meats. This would reduce the demand for beef and likely lead to fewer cows being reared which then cuts down the amount of land, water and methane consumed/produced which is better for the environment.
Similarly, as has been pointed out, the conversion of the hide to leather is a pretty horrific process including the use of cyanides, chromium compounds (which produce very carcinogenic byproducts), acids, arsenic, formaldehyde and a lot of water.