With the increasing environmental problems being experienced throughout the world over, there is an increasing need to have environmentally friendly practices in the industrial processes. Industry 5.0 as a new vision of manufacturing industry is a breakthrough that involves the development of technology and environment and human welfare. This chapter discusses the following important points of sustainability and the circular economy in the framework of Industry 5.0: energy efficiency, waste reduction, emissions control, and the implementation of principles of the circular economy in the industrial system. Through the focus on responsible use of the resources, new recycling procedures, and the ethics of the industry, Industry 5.0 will establish a balanced interaction between industrial development and the wellbeing of the planet. Industry 5.0 is opening up the path to the industries to prosper and leave the least impact on the environment through the application of high technologies, regulatory compliance, and strategic decision-making frameworks.