The progressive growth of manufacturing industries has resulted in a consequential increase in waste generation, posing significant challenges to environmental sustainability. Within the realm of manufacturing, waste emerges as an inevitable byproduct, accumulating at an unprecedented rate and exerting a profound strain on ecological equilibrium. By harnessing the transformative potential of recycling, manufacturing facilities embrace a paradigm shift, transcending the mundane constraints of waste disposal. Thus, recycling fosters building nations’ capabilities by incorporating an array of exquisite and comprehensible linguistic prowess. One such change can be brought by reusing the foundry sand after the casting process to power the abrasive water jet machining (AWJM) to carry out the machining process. Therefore, in this research work, the aim was to promote sustainable development and indulge in the simultaneous cutting of a copper-based shape memory alloy. Shape memory alloys are perceived to be the most potential product in the aerospace and biomedical industries. There are only fewer indagations that analyze and investigate the effects of AWJM on the CuAlFe shape memory alloys. The effects of the cutting process on the surface and shape memory characteristics of the CuAlFe shape memory alloy were analyzed by performing tests like scanning electron microscopy, differential scanning calorimetry, and finally X-ray diffraction. The shape reverting temperature of the alloy before and after machining was 416.57 °C and 415.43 °C indicating the loss of shape memory effect even after AWJM is very less. Apart from this, optimal machining parameters were also deduced using Taguchi-Grey relational analysis of the L27 orthogonal design matrix. Of the chosen 3 parameters, the selected combination from this method was A1B1C2. From this analysis, the optimal material removal rate and surface roughness was found to be 1.873 (cm3/min) and 2.965 (μm) which are far good values in the industry. The outcomes proved to be effective in examining the optimal parameters and the surface properties of the CuAlFe Shape memory alloy thus ensuring sustainable development.