The retailer is about to unveil a “sustainability index” on every product it sells.

This isn't a facetious question. Wal-Mart has an enormous influence over which products get made, and which don't. Last year, the company said it would stop selling baby bottles containing the chemical bisphenol-A, which is approved by U.S. and European regulators. (A story that I wrote about this for Fortune magazine ran under the headline "Wal-Mart: the New FDA"). When, as part of its ambitious sustainability program, Wal-Mart said it would sell only concentrated laundry detergent, which uses less packaging and water, manufacturers fell into line. The company even makes foreign policy, of sorts, declaring last year that it would stop selling products made with cotton from Uzbekistan, to try to put an end to forced child labor in cotton harvesting.

Wal-Mart doesn't ultimately want to own the sustainability index, which is why it is forming the consortium. "They are willing to get the ball rolling, but they want to hand it off to someone else," an insider says. Most likely, the index will eventually be run by a nonprofit group financed by retailers and suppliers, much like the Marine Stewardship Council, which certifies the sustainability of fisheries, and the Forest Stewardship Council, which does the same for wood products.

Still, measuring the sustainability of a flat-screen TV, a trampoline, a backpack, a baby stroller, or a bag of poultry feed—all of which are sold by Wal-Mart—is a whole lot more complicated than certifying a fishery or forest. Wal-Mart plans to use a tool known as Life Cycle Assessment, which is designed to measure the full environmental impact of a product through manufacture, use, and disposal. It will ask its 60,000 suppliers to help.

"The idea is to be as comprehensive as possible," says Jon Johnson, who holds the Walton professorship in sustainability at the University of Arkansas. "Unless you look at the entire life cycle of the product, you just can't measure the environmental impact." Johnson and Jay Golden, an assistant professor in the school of sustainability at Arizona State, are leading the consortium.

For the index to work, consumer-goods makers will need to understand the origins of everything they put into their products. Wal-Mart has talked about assessing sustainability in four broad categories: energy and greenhouse gas emissions, materials, natural resources, and "people and communities," which will attempt to measure social impacts. Right now, most supply chains are opaque: Try tracing a hamburger to a particular cow.

"Can you have trackable, traceable supply chains that give you full visibility?" asks Andrew Hutson of the Environmental Defense Fund, who works with Wal-Mart. "It is extraordinarily difficult at this moment. But it can be done." We'll soon see if he is right.