The current work advocates the use of Cashew Nut Shell Liquid/Oil (CNSL), an oil extract of the leftover cashew nut shells, as a novel environment-friendly cutting fluid in sustainable machining operations. The tribological characteristics of CNSL obtained on a pin-on-disc tribometer are found to be better compared to the traditionally used cutting fluid. Experiments are conducted on the surface grinder with EN8 material, considering input parameters, such as cutting fluid type, grinder speed and grade, work speed, and depth of cut, with Surface Roughness (Ra) and Grinding Temperature (Temp) being the responses. Input parameter optimization is performed using Taguchi’s statistical models. A total of 36 investigative and six validation experiments are conducted, and a prediction model is proposed. When Ra and Temp are optimized simultaneously, the prediction value of Ra is 0.071 μm, and the corresponding value of Temp is 31.6 °C for which the experimental values are 0.072 μm and 32 °C respectively. This work also applies the TODIM (TOmada de Decisao Interativa Multicriterio, in the Portuguese language), a multi-attribute decision-making method for ranking the input parameter settings. The study reveals that the performance of CNSL is better than that of a traditional cutting fluid, and the TODIM method can be successfully applied to rank the input parameter settings.