Construction and Demolition Waste (CDW)-based geopolymers are expected to lower the construction sector’s environmental impacts by reducing the use of ordinary cement and reusing waste materials and are considered a substantial step toward a circular economy and environmental sustainability in the long run. However, due to the energy-intensive mechanical, thermal, and chemical processes involved in preparing the CDW-based geopolymers, it is essential to quantify their environmental implications in the early stages of development. The objective of the study is to analyze the environmental sustainability of newly developed geopolymers containing CDWs, i.e., roof tile (RT), hollow brick (HB), red clay brick (RCB), and glass waste (G) based geopolymer binder materials. The study aims to identify the environmental impact of their critical process parameters using Life Cycle Assessment (LCA) approach and evaluate their production feasibility at a location with completely different energy and water scenarios. According to the results of the study, compared to Ordinary Portland Cement (OPC), all the CDW-based geopolymers had lower environmental impacts. G-based geopolymer binder resulted in the lowest Global Warming Potential (GWP) with a 38% reduction, followed by RT and HB with 35.3% and 34.8%, respectively. However, due to the energy-intensive processes of crushing and grinding CDWs, electrical energy is identified as a hotspot with significant environmental impacts. The replacement of mix-grid energy with hydropower reduced GWP by 63.3%, Eutrophication (EP) by 52.5%, Acidification potential (AP) by 86.4%, and fossil fuel deposition (FFD) by 74%. The highest environmental performance is calculated for electricity produced from hydropower, wind, and photovoltaics, then geothermal and biomass resources.