Indicators of environmental impact can be used to inform the production, promotion and consumption of sustainable diets. Most environmental impacts associated with food production occur on farm; thus sustainable diets are reliant on sustainable agricultural practices. In this paper we review the current use of environmental indicators and metrics from global to local scales and highlight the need for locally relevant definitions to inform sustainable diets. Using Australia as a case study, we show that the diversity of food production systems is accompanied by a diversity of environmental issues, including climate change, land scarcity, nutrient pollution, water scarcity and biodiversity loss, each uniquely affecting different systems. However, while global datasets and indicators provide a consistent basis for estimating impacts and enabling country and food product comparisons, they often fail to capture the nuances of food production at national and sub-national scales. For example, land use may be a poor indicator of biodiversity loss when grazing a natural, low input rangeland. Similarly, water use is only relevant where there is competition for the resource, and eutrophication only where there is an adjacent water system to pollute. Thus, reporting frameworks used to inform sustainable diets need to be based on indicators that consider the context of local systems to demonstrate the clear linkage and how specific farming systems can drive sustainable diets. The development of provenance and traceability systems mean the tools are already available to track impacts at a regional, or even individual farm, level.