Global carbon emissions from the construction sector account for a large amount of these emissions, with cement production playing a big role. The incorporation of Supplementary Cementitious Materials (SCMs) into concrete has surfaced as a viable remedy in response. Utilizing industrial by-products, reducing CO2 emissions, and improving durability, SCMs including fly ash, ground granulated blast furnace slag (GGBS), silica fume, and calcined clays have the potential to lessen the environmental impact of cement manufacture. To highlight the environmental benefits of SCMs at every stage of their lifecycle—from raw material extraction to disposal—this study provides an extensive assessment of Life Cycle Assessment (LCA) research on the subject. According to the review, the use of SCMs may dramatically lower the embodied energy and emissions of concrete. Materials such as fly ash or GGBS can substitute Portland cement and cut carbon emissions by up to 40%. Utilizing SCMs also supports the circular economy by recycling industrial waste and increasing resource efficiency. However, issues including geographical availability, the requirement for established criteria, and the heterogeneity of SCM quality continue to stand in the way of their wider adoption. To maximize the use of SCMs in sustainable building, the study highlights topics for future research and examines the developments in life cycle assessment (LCA) approaches. This study highlights the crucial role that SCMs play in accomplishing the sustainability objectives of the construction industry by combining the most recent research, and it also offers a guide for upcoming advancements in green building techniques.