Walmart Stores Inc., the world’s largest retailer, plans to demand that all its suppliers measure the environmental cost of making their products so Walmart can calculate and post an eco-rating for each item.

“Customers want products that are more efficient, that last longer and perform better,” said Mike Duke, Walmart’s president and CEO, in a release. “Increasingly [customers] want information about the entire lifecycle of a product so they can feel good about buying it. They want to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way... We do not see this as a trend that will fade.”

The ambitious program, announced today, is likely to spur companies to redesign products from electronics to jeans, a proposition sure to add costs when most are trying to pinch pennies during the recession.

In the program’s first phrase, Walmart will ask its 100,000 global suppliers to answer 15 questions focused on four areas: energy and climate; material efficiency; natural resources; and people and community.

“The survey will include simple but powerful questions covering familiar territory, such as the location of our suppliers’ factories, along with new areas like water use and solid waste,” said John Fleming, chief merchandising officer, Walmart U.S., in a release. “The questions aren’t complicated but we’ve never before systematically asked for this kind of information. The survey is a key first step toward establishing real transparency in our supply chain.”

For the second phase of the initiative, Walmart will fund the creation of the “Sustainability Index Consortium”—a group of universities, suppliers, retailers, NGOs and governments working together to develop a global database of information on the lifecycle of products.

The index will operate on an open platform.

“It is not our goal to create or own this index,” said Duke. “We want to spur the development of a common database that will allow the consortium to collect and analyze the knowledge of the global supply chain.”

The third and final phase will see the information gathered by the consortium translated into a ratings system for consumers.

Shoppers won’t see green ratings on products for several years, said Jay Golden, a professor in the Global Institute of Sustainability at Arizona State University and co-director of the consortium.

The move comes amid discussions on Capitol Hill about the possibility of U.S. environmental labelling regulations. But Golden said having the world’s largest retailer lead the way will “move it so much faster.”

Retail industry consultant Burt Flickinger said he applauds the program but worries how it will affect suppliers. New labelling and product redesign can increase a product’s cost by 1% to 3%, he said.

“Suppliers are going to have to absorb the cost increases,” he said.

Flickinger also said the new ratings will add value in environmentally conscious regions like California and New England. But shoppers in other areas who focus more keenly on low prices may not appreciate it as much. —Associated Press with files from Marketing staff