To counter the negative environmental impact, particularly greenhouse gas emission generated by the construction industry, many low-impact materials are being produced and researched having neutral CO2emissions and low thermal conductivity. One of these materials is lime-hemp concrete, a self-bearing bio-based insulation material with low thermal conductivity and good CO2uptake but with weak mechanical properties. In this study alternative magnesium binders are proposed to substitute the traditionally used lime binder in hemp concrete, comparing the environmental impact of these binder composites. To make the comparison, experimental mixtures with both traditionally used and alternative binder composites were produced and their mechanical and thermal properties tested. The magnesium binders showed promising results as these composites were approximately two times stronger, having similar density and thermal conductivity. Afterwards the Life Cycle Assessment (LCA) was carried out to evaluate and compare the environmental impact of all tested composites. Lime based binder composites achieved negative CO2emissions, varying from −46.5 to −68.6 kg CO2/m3. Alternative binder, magnesium phosphate cement, demonstrated significantly greater environmental impact than all other binders due to its hardener, potassium phosphate, which is highly energy and resource intensive. Magnesium oxychloride cement showed promising results with bio-based filler, as their combined environmental impact was lower in most categories compared to lime-hemp concrete, and negative CO2emissions of −37.38 kg CO2/m3were achieved. These negative CO2emissions were achieved with biogenic CO2uptake from hemp growth and low binder content, thus achieving low thermal conductivity of 0.062 W/m2*K at 214 kg/m3density.