An environmentally benign, highly conductive, and mechanically strong binder system can overcome the dilemma of low conductivity and insufficient mechanical stability of the electrodes to achieve high performance lithium ion batteries (LIBs) at a low cost and in a sustainable way. In this work, the naturally occurring binder sodium alginate (SA) is functionalized with 3,4-propylenedioxythiophene-2,5-dicarboxylic acid (ProDOT) via a one-step esterification reaction in a cyclohexane/dodecyl benzenesulfonic acid (DBSA)/water microemulsion system, resulting in a multifunctional polymer binder, that is, SA-PProDOT. With the synergetic effects of the functional groups (e.g., carboxyl, hydroxyl, and ester groups), the resultant SA-PProDOT polymer not only maintains the outstanding binding capabilities of sodium alginate but also enhances the mechanical integrity and lithium ion diffusion coefficient in the LiFePO4 (LFP) electrode during the operation of the batteries. Because of the conjugated network of the PProDOT and the lithium doping under the battery environment, the SA-PProDOT becomes conductive and matches the conductivity needed for LiFePO4 LIBs. Without the need of conductive additives such as carbon black, the resultant batteries have achieved the theoretical specific capacity of LiFePO4 cathode (ca. 170 mAh/g) at C/10 and ca. 120 mAh/g at 1C for more than 400 cycles.