The global environmental agenda since the 1990s has seen a boom in using sustainability indicators to evaluate environmental impact and capacity. Based on the experience and lessons learnt internationally over the last 25 years, this chapter critically examines the nature, application and challenges of adopting indicator-based approaches to planning in the environmental field. Due to the complexity of reality and inherent tensions of developing indicators for environmental planning, there is a pressing need to develop more strategic, effective and understandable indicators to measure long-term and high-order outcomes that are cross-cutting and overarching. With the diversity of issues at different spatial scales and contexts, we argue that the local level plays a key role in monitoring the progress of sustainable development and linking local issues with policy co-production at the international and national levels. Both a top-down framework and engagement with different voices at the local level are required to develop robust indicator frameworks for local development.