You might want to consider a fiber-cement siding product. This material will give you the advantages of durability and low maintenance -- qualities that are important in the scheme of things when thinking about sustainability.
The material is not attractive to termites and mold, and it is fire resistant. It doesn't warp or buckle, and is easy for an experienced and qualified contractor to install. It resists deterioration by UV rays and salt. Most manufacturers offer a 50-year warranty on fiber-cement siding products. We've done several installations over the years, and have been very pleased with the product, the performance, and the look.
Fiber-cement siding looks like wood siding, and comes in several options, including shingles. You get the look of painted shingles, though, not the natural wood finish you can get with cedar shingles. The painted finish on fiber-cement siding will last much longer than on wood siding, and there's even the option of getting a pre-finished product in many very durable, "baked-on" colors. Fiber-cement siding will be less expensive than wood siding, too, and if you use the pre-finished option, you might skip the exterior painting step in the construction process, at least for the body of your home, which could be a cost savings.
Fiber cement is considered a not only because it is durable, but because it is not wood - conserving this resource. It is made from compressed cellulose fibers and Portland cement, or with some of the greenest manufacturers, "recycled" fly-ash (a byproduct of the coal industry). Some manufacturers use cellulose fibers from sustainably managed forests.
Connie McCullah, one of our Green Home Guide "Ask A Pro" experts, wrote a great article comparing the "greenness" of fiber-cement siding to vinyl siding, entitled "Which is greener: fiber cement or vinyl siding?" Be sure to read this, too.
Finally, ask your green contractor to bring you samples of fiber-cement siding and find other homes in your neighborhood that have used the material. Seeing in person is always better than looking at photos online.
For more information:
Check Carl Seville's Q&A "What's the best affordable sustainable siding option? Any thoughts on roofing materials and gutters?"