With the growing emphasis on cleaner production in the manufacturing sector, minimizing energy consumption (EC), greenhouse gas (GHG) emissions, and operational costs—without compromising process performance—has become essential for sustainable development. This study investigates the environmental and economic impacts of electric discharge machining (EDM) of annealed SS316L stainless steel, focusing on EC, electrode wear (EW), dielectric usage, and associated GHG emissions and carbon costs. To enhance machining sustainability, key EDM parameters—pulse ratio (PR), peak current (IP), and graphene nanoplatelet powder concentration (PC)—were optimized. Moreover, three electrode materials (aluminum, brass, and copper) were comparatively evaluated for their influence on performance and environmental impact. The findings indicate that EC is predominantly influenced by IP, whereas pulse ratio has the greatest effect on EW and dielectric consumption (DC) and their corresponding GHG emissions and carbon costs. Among the materials tested, copper electrode demonstrated the most favorable performance, offering lower EC, minimal wear, and reduced emissions due to superior electrical and thermal conductivities. In contrast, aluminum electrode resulted in significantly higher energy use and environmental impact, while brass electrode showed intermediate performance. Specifically, GHG emissions and carbon costs were found to be 20.98%–30.90% higher with brass and 58.70%–80.64% higher with aluminum compared to copper electrode. Finally, the outcomes were mapped against relevant United Nations Sustainable Development Goals (SDGs), emphasizing the broader significance of sustainable manufacturing practices in EDM in terms of clean energy, and responsible consumption and production.