The escalating global environmental crisis demands an urgent reorientation of educational paradigms, particularly within physics instruction. Thermodynamics the fundamental science of energy, work, and entropy offers a natural and powerful bridge between abstract physical principles and concrete sustainability challenges. This review synthesizes the scholarly literature on integrating sustainable development education into physics instruction, with a specific focus on resource utilization and environmental awareness cultivation. Through a systematic analysis of 45 peer-reviewed studies spanning 2015–2025, we examine how thermodynamic literacy can transform sustainability education from aspirational discourse into quantitatively grounded decision-making. The review identifies three core contributions of thermodynamic literacy: (1) providing first-principles explanations for resource limits and efficiency boundaries via the First and Second Laws of Thermodynamics; (2) enabling rigorous assessment of resource utilization through concepts such as Energy Return on Investment (EROI), exergy analysis, and entropy accounting; and (3) cultivating environmental awareness by making invisible energy flows and waste streams visible and quantifiable. We find that effective pedagogical approaches include project-based resource audits, exergy literacy integration, socio-scientific inquiry frameworks, and active learning strategies aligned with the Sustainable Development Goals. Despite growing recognition of the physics–sustainability nexus, significant gaps remain: validated assessment instruments for thermodynamic literacy are underdeveloped, teacher professional development lags behind curricular ambitions, and systematic integration across educational levels is fragmented. The review concludes with a proposed framework for thermodynamic literacy development spanning cognitive, analytical, and practical competencies and offers recommendations for curriculum design, pedagogical innovation, and future research. Keywords: thermodynamic literacy; sustainable development education; resource utilization; environmental awareness; physics education; energy return on investment; exergy; entropy; second law of thermodynamics.