Globally, the construction industry contributes to 33% of carbon emissions and 40% of energy consumption; therefore, it is essential to find greener construction alternatives to reduce such emissions. Structural Insulated Panels (SIPs) proved to be a sustainable option in building construction due to their excellent thermal performance, leading to a major reduction in energy consumption. Subsequently, this study aims to develop sustainable (SIPs) using Wood Plastic Composites (WPC) and insulating foam, focusing on mechanical strength and thermal efficiency while leveraging recycled and waste materials. The SIPs investigated are an assembly of Wood Plastic Composites and insulating foam. Mechanical tests were conducted on the WPC including flexural strength, compressive strength, tensile strength, bending modulus, and water absorption. The results showed 37 MPa flexural strength, 28 MPa compressive strength, 12 MPa tensile strength parallel to extrusion, 7 MPa tensile strength perpendicular to extrusion, bending modulus of 4766 MPa, and water absorption of 1.30%. For the insulating materials, Extruded Polystyrene (XPS) was investigated in different densities to determine its thermal conductivity. For the SIPs assembly, two adhesives were utilized, which are Polyvinyl Acetate and Sodium Silicate. Both adhesives did not influence the compressive strength of the composite. Moreover, mechanical tests were conducted on the entire SIP including compressive strength, core shear strength, and the thermal conductivity of the SIP was compared to a traditional masonry cement wall. Furthermore, carbon emissions associated with SIP production were compared to conventional reinforced concrete (RC) to quantify the relative sustainability of the proposed panels.