Spent coffee grounds (SCGs) are known for containing many organic compounds of interest, including carbohydrates, lipids, phenolic compounds and proteins. Therefore, we investigated them as a potential source to obtain carbon dots (CDs) via a nanotechnology approach. Herein, a comparison was performed between CDs produced by SCGs and classic precursors (e.g., citric acid and urea). The SCG-based CDs were obtained via the one-pot and solvent-free carbonization of solid samples, generating nanosized particles (2.1–3.9 nm). These nanoparticles exhibited a blue fluorescence with moderate quantum yields (2.9–5.8%) and an excitation-dependent emission characteristic of carbon dots. SCG-based CDs showed potential as environmentally relevant fluorescent probes for Fe3+ in water. More importantly, life cycle assessment studies validated the production of CDs from SCG samples as a more environmentally sustainable route, as compared to those using classic reported precursors, when considering either a weight- or a function-based functional unit.