The present study examines the formulation of a biocompatible polyethylene composite that integrates Nelumbo nucifera natural fiber (NNNF) and Nano-banana peel waste filler (NBPF) for prospective environmental applications. The composite was made with compression molding and then fine-tuned with the use of ANN (Artificial Neural Network) prediction models and Taguchi-based multi-criteria decision-making tools (CRITIC and EDAS). The hybrid amalgamation of these composite materials has been little investigated in the environmental domain. The FTIR analysis showed that the banana peel waste filler was more compatible with the PE matrix, since there was a peak maximum at 1451 cm^-1. This peak indicates asymmetric displacement of the Carbon�Oxygen (C-O) and Carbon�Hydrogen (C-H) functional groups. The NF exhibited homogeneous distribution, enhancing stress transmission and flexural characteristics. There was a statistically significant increase in accuracy using the ANN model (r=0.61523). The ideal configuration was found by multi-response optimization to be a combination of 4 NaOH treatment, 3.5 wt NBPF, 35 wt NNNF, and a length of fiber 3 cm. This resulted in a TS of 24.75 MPa, FS of 31.25 MPa, and IS of 21.47 kJ/m². These produced composites were biodegradable and lightweight, which made them appropriate for a range of environmental uses, including biodegradable goods, eco-friendly building materials, and sustainable packaging. © 2025 Elsevier B.V., All rights reserved.