I'm interested in replacing the siding on my home, but want to choose a material that is sustainable. What's the best choice available?
Much depends on what you consider sustainable. The two major sustainability questions concern the energy to produce it, and the resource used to produce it. Additional concerns are the difficulty to recycle/dispose of at end of life, and the costs of both moving the resource to manufacturing point, and moving the product to the use point.
AFAIK there is no general purpose definition. Here's some comparisons and tradeoffs:
Group 1. Plastic/Petrochemical
Vinyl -- probably one of the worst picks. All sorts of poisonous byproducts in it's manufacture, and in disposal. Relatively innocuous in use. Lifetime 15-25 years.
Shingle -- Similar to the standard asphalt and fiber and rock shingles used on roofs, but designed to be used vertically. Tend to last longer as siding than they do as roof, because there is no snow load, no hail, less sun. Not terribly hard on the environment -- basically the same material as roads with glass fiber added. As long as we are going to use fossil fuel, we will have a surplus of asphalt. Of this group, I consdier this one most sustainable.
Group 2: Wood based.
Wood is the only fully renewable material on this list, so in that sense is the most sustainable.
Wood slab. Formed from the first cut off the side of a log, bark scraped off, and a half lap rabbeted on each side. Requires new coat of log oil every 5 years or so. Very sustainable -- better use than for fuel, which is otherwise what happens to slabs. Very time consuming to put on.
Clapboard. Requires large trees as feed stock, and so competes with the other uses for large trees. If Cedar clapboard is used, puts higher demand on an already high demand wood. Requires regular painting.
Tongue & Groove Milled siding. Similar to clapboard but both thicker and narrower. Can be made with smaller trees. Uses more wood overall.
Chip based siding -- Made from slash and scrap wood. Requires regular painting. Requires significant petrochemical resins to bond the chips together.
Split wood shake -- usually cedar, but redwood, and large spruce can also be used. Shakes can be made from short log ends, and stumps.
Group 3 Metal based.
Metal siding requires careful attention to the details around doors and windows. It also has zero water permiability, so some form of ventilation or rain screen needs to be behind the siding. Metal siding usually won't require care once up.
Aluminum siding. High initial embodied energy cost, but will last a very very long time. Subject to dents. Aluminum recycles quite well.
Steel siding. Lower energy than aluminum, but also lower lifetime. Better dent resistance. Also endlessly recyclable.
Group 4. Cementaceous based siding.
Relatively high emboddied energy, and low recycleability. Used material is only good for fill.
Portland cement and fiber: Portland cement is one of the highest energy materials out there -- a significant amount of our cultures total energy budget is spent making portland cement. In that sense it's unsustainnable. The raw material is limestone, and we have whole mountains made of it.
The fiber can be one of several minerals, indlcuding asbestos, serpentine, rock wool from slag, spun glass from recycled glass. Coloring can be either embedded mineral pigments, or painted. If embedded will last a very long time. Essentially impossible to recycle -- use as fill. Note that it requires a lab test to determine if the fiber component is asbestos.
Lime/Earth Plaster: See any resource on strawbale building. The energy cost of lime is much smaller than for portland cement, and earth based is just clay and fine sand. However the usual use is with buildings with wide eaves to reduce the amount of rain hitting them. They are very labour intensive to apply, and require attention to maintenance.
Stucco: Relatively cheap, long lasting, but very limited in available colours. While it can be painted, it seldom is. Stucco housing developments tend to be grey and dreary looking. Stucco is also based on portland cement.
Overall, My opinion is that the wood slab siding is the most sustainable. The resource is renewable, the energy costs moderate.
Second on my list are the lime/earth based plasters if you have a house/climate that allow it. Stucco comes close.
Third on my list is steel siding.
A better answer than this would require deciding which factors are most important, as well as energy and resource use of the particular product and manufacturer.
The ultimate sustainable action is to do nothing. It requires no energy, no resources. If the present siding works and is not harming you while present, the the most sustainable siding is the present siding.
No, it's not a health concern. Right now it's locked up as siding. If you remove it, you will break it up, make dust, which IS a health problem, but sitting there bonded to concrete on the side of your house it is harmless.
Keep it painted to keep dust from spalling off of it. although that is a pretty minor concern.
Even asbestos insulation is largely harmless once in place. The hazard is in working around it, with it, but asbestos bonded into tile or cement siding is reasonably safe unless some process is turning it into powder.