Currently, construction industry is unsustainable in nature due to the over dependency on the energy consumptive materials. Thus, to transform the industry from unsustainable to sustainable focus is on innovative materials developed from locally available waste. In this research, focus is on development of alkali activated binder using combination of fly ash (FA), rice husk ash (RHA) and bottom ash (BA) as an alumina silicate source material. Further, thermal performance of the developed material has been studied to understand its impact on the heat transfer and insulation characteristic s of the material. The alkali activated binder developed from bottom ash shows better performance than rice husk ash (RHA) based binder. However, the thermal performance of the rice husk ash binder is more suited for the insulation due to its low thermal characteristics. The lowest thermal conductivity for the developed binder was having value of 0.31 W/m2K for rice husk ash (RHA) based binder.