By Carol Clark
CNN.com Correspondent

HILLSBORO, Oregon (CNN) -- One of Derek Smith's first assignments as the corporate sustainability manager for the catalog and retail company Norm Thompson Outfitters was to travel to California to study the environmental impact of cotton growing.

"I walked the fields of central California and learned how devastating cotton is," Smith says. "Ten percent of the world's pesticides use is for cotton. In San Joaquin they use water from the river to irrigate the fields, load it with chemicals known to cause cancer, and then return it to the river."

Several top Norm Thompson executives and five of the company clothing buyers were also on the trip.

"We came back and said, 'We're going with all organic cotton within five years,'" says Smith. "When you see first-hand the negative impact your business is having you have no choice but to head in a different direction."

Norm Thompson Chairman John Emrick, a Portland native, is well known for his efforts to balance dual roles as a conservationist and a capitalist.

The company's headquarters in the Portland suburb of Hillsboro was one of Oregon's first "green" buildings when it was completed in 1993.

"It feels good to work here," says Smith, as he gives a visitor a tour of the 54,000-square-foot facility. "It's a hopeful place."

Recycled materials were used whenever possible in the construction. The lobby floor is made from Philippine Apitong wood salvaged from decommissioned railroad boxcars. The "stone" walls are actually a mix of cement powder and crushed beer bottle or windshield glass. Ceiling tiles in the meeting rooms are constructed from recycled newspaper and phone books. Even the paint used is recycled primer.

Sensors automatically turn off lights after five minutes if they detect no movement and adjust the light level according to the available daylight. Whenever possible, the windows are opened to take advantage of the fresh air and connect employees to the sounds of birds in the wetland bordering two sides of the building.

Heat generated by occupants and computer equipment is caught by heat retention coils to keep the building warm during the winter months.

Smith joined the company a year ago after receiving his MBA.

"I wanted to combine my love of business with my passion for the environment," he says. "This is ideal for me."

One of the most challenging tasks Smith faces is getting more recycled content into the Norm Thompson catalogs. The company generated $150 million in sales last year through sending out 80 million catalogs. It currently uses only 10 percent recycled paper on its inside pages.

"That's actually far ahead of the mainstream, but we're trying to get it much higher," Smith says.

Tests have shown that even slight changes in paper content will cause people to order more -- or less -- due to their perception of the quality of the product. Norm Thompson is experimenting with ways to use more recycled content without affecting sales.

"Virtually all the catalogs you receive in your mailbox are printed on virgin paper," Smith says. "That's what we want to change."

Smith is charged with making sustainability profitable. The company has set a goal of recouping $5 million from sustainable activities within the next five years.

"If we cut our office paper consumption in half, we'd save $30,000," Smith says. "If we make our order forms just a few inches smaller that not only saves paper but it saves a lot of money."

By proving that conservation can boost profits, Norm Thompson hopes to inspire other businesses to follow suit.

"If we can be a model for how to be a successful company while reducing our environmental footprint, then that's going to make a much bigger impact," Smith says. "The whole world is connected. You can't get there alone."