The current food system is not sustainable, and food consumption contributes substantially to the climate crisis. Several challenges make it difficult for consumers to make sustainable food decisions. Therefore, policy action is indispensable to reduce the environmental impact of food choice. We present the results of a literature review of 160 studies, investigating four types of consumer-targeted policy instruments (market-based, information-based, regulatory, and nudging) and their potential to improve the sustainability of food systems. Our results show that (i) less intrusive policy instruments (information-based, nudging) are more popular and widespread and can be combined (however, more intrusive instruments [market-based, regulatory] are more effective); (ii) consumers rely on information-based instruments to make sustainable food choices and are willing to pay a price premium for sustainable products; and (iii) sociodemographic characteristics such as gender (female) and education level (higher) play a key role in sustainable food choices. Finally, we recommend improvements in the transparency of reporting methods and definitions used to describe sustainability of food products. This would increase the potential for comparison, transferability, and generalisability of findings and enable the development of effective policies. Sustainability is a pressing issue, and joint efforts along the food system are urgently called for.