Unregulated extraction is to blame for the rising demand for sand and gravel, which is currently pegged at 40-50 billion tonnes per year.
The United Nations Environmental Programme wants countries to establish regulations for sand extraction activities.
According to the UN Environment report titled Sand and sustainability: Finding new solutions for environmental governance of global sand resources, extraction has reduced sediment delivery from rivers to many coastal areas, leading to reduced deposits in river deltas and accelerated beach erosion.
"A growing trend of irresponsible extraction in marine, coastal and freshwater ecosystems make this a sustainability challenge of significant proportions," reads the report.
Sand and gravels resources are the second largest resource extracted and traded by volume after water.
Across the world, these resources are the least regulated.
Acting executive director of UN Environment Joyce Msuya said the world is spending the sand budget faster that it can produce responsibly.
"By improving the governance of global sand resources, we can better manage this critical resource sustainably and truly demonstrate that infrastructure and nature can go hand in hand," said Ms Msuya.
According to the report, the international trade in sand and gravel is growing due to high demand in regions without local sand and gravel resources.
"Sand extraction is fast becoming a transboundary issue due to sand extraction bans, international sourcing of sand for land reclamation projects and impacts of uncontrolled sand extraction beyond national borders," reads the report.
The report also calls for investment in sand production and consumption measurement, monitoring and planning.
The report noted that to meet demand in a world of 10 billion people without harming the environment, effective policy, planning, regulation and management will be needed.