This paper presents the investigation of energy efficacy, strength maturation, and environmental management of palm oil industrial waste materials, such as palm oil fuel ash (POFA) and oil palm shell (OPS). The industrial by-product POFA was used as partial, and the agro-based waste material OPS was employed as an absolute replacement of ordinary portland cement (OPC) and conventional natural coarse aggregate, respectively, in manufacturing sustainable lightweight concrete. The fresh concrete properties (workability and density), ultrasonic pulse velocity (UPV), compressive strength, water absorption, residual strength, thermal conductivity, and microstructural analysis have been investigated and reported. Four different concrete mixes with densities ranging from 1610 kg/m3 to 1935 kg/m3 were produced by replacing the OPC with POFA by a weight proportion of 0%, 10%, 30%, and 50%. Maximum compressive strength of 42.8 MPa was found at 365-day for 10% POFA based oil palm shell concrete (OPSC). The samples were exposed to selected peak temperatures (400 °C) to determine the residual strength at 28-, 56-, 90-, and 365-day. The UPV and compressive strength tests were performed for both heated and normal samples. The energy-saving status for POFA based OPSC was investigated by performing the thermal conductivity test at 365-day. The thermal conductivity of POFA based OPSC exerted lower values compared to that without POFA. The microstructure with the phase of developed fibrous C–S–H and pores inside the concrete were characterized and analyzed by scanning electron microscopy (SEM) images. The largest micro-cracks between coarse aggregates and cement paste were found in concretes containing 50% POFA, and the smallest one was for 10% POFA based OPSC. Considering the optimization in terms of compressive strength, thermal conductivity, residual compressive strength, and microstructural analysis, it is recommended that the inclusion of POFA in OPSC can be considered a structural grade concrete along with the thermal insulation.