Digital Twin is an emerging technology that is used for different purposes, e.g monitoring, optimization, prediction, etc., in a wide range of real-world applications. Manufacturing is the most prevalent industry employing digital twin technology to achieve sustainability through enhancing smartness and intelligence. In this regard, several literature reviews have been established on the digital twin's role in sustainable manufacturing development. However, despite the importance of assessment and evaluation of developed sustainable actions and policies, and the high capability of the digital twin concept to support it, there is a lack of effort to systematically review the current state-of-the-art on the contribution of the digital twin in sustainability assessment and policy evaluation. By conducting a systematic literature review, this paper seeks to close this gap. By applying inclusion and exclusion criteria, 12 relevant papers are identified to be analyzed in more detail. The results show the ongoing effort on developing architectural frameworks and cutting-edge methodologies for integrating Digital Twin with conventional sustainability assessment and policy evaluation approaches. However, its potential benefits are not fully utilized, as evidenced by the limited effort put forth in this direction.