This study presents the Wood Protection Sustainability Index (WPSI), a novel decision-support tool aimed at evaluating wood preservatives utilized in Chile and facilitating a shift toward more sustainable wood protection practices. WPSI encompasses four essential attributes: protection treatment, wood durability, in-service risk, and sustainability. These are assessed under two distinct scenarios. Scenario 1 represents current market practices, where chromated copper arsenate (CCA) remains prevalent due to its accessibility and affordable cost. In contrast, Scenario 2 prioritizes sustainability, demonstrating that copper azole (CA) and alkaline copper quaternary (ACQ) surpass CCA in performance, with CCA ranking lowest due to its environmental implications. Furthermore, a SWOT analysis accompanies the index, identifying key challenges and opportunities within Chile’s wood preservation industry. The findings highlight the importance of aligning national strategies with Environmental, Social, and Governance (ESG) frameworks, as well as the Sustainable Development Goals (SDGs), through performance-based regulations and safer alternatives. The WPSI can be integrated with local standards, regional risk classifications, and national preservative approval systems, allowing for meaningful comparison across diverse global contexts. This approach promotes more sustainable construction practices while ensuring both technical and economic viability.