Wood has typically lower environmental impacts compared to other materials. However, it also has reduced capacity to store thermal energy, potentially causing increased operating energy demand. Here we investigate this trade-off between environmental impacts of the construction and operating phase and examine key factors determining the overall environmental performance. To do so we couple a sophisticated building simulation with a life cycle assessment tool. We investigate a massive and a wooden variant of a single-family home. Sensitivity is analysed by altering ten different input parameters, using upper and lower extreme values. We find that the influence of building thermal inertia on annual energy demand is relatively small, but may become significant when the building service life is taken into account. In general, impacts from building operation outweigh material-related ones. Accordingly, parameters affecting energy demand (e.g. ventilation rate) are most influential. Since massive and concrete buildings react differently to changes in different parameters, we recommend individual design strategies for each building variant.