Working, Naturally

The company also uses energy-saving systems that are a bit more conventional. Above the aisles of clothing and gear racks, for example, motion detectors automatically increase the intensity of dimmed lights whenever people walk by, while in other parts of the space, the lights go off altogether if no one is moving nearby.

As befits any global shipping center, there's always a lot of cardboard lying around at the Reno facility, and Patagonia is committed to recycling as much of it as possible. The company buys only board that is at least 35% recycled (much of the board is 100% recycled), and it takes steps to ensure that the material doesn't go to waste. When goods arrive in boxes from the company's network of contract manufacturers, workers break down the boxes, put them on pallets, and ship them back to the manufacturers to be used again.

The facility makes ingenious use of several other recycled goods. In the bathrooms, the countertops are a riot of color: They were built with a wide variety of recycled plastics, such as empty soda bottles. The building does have some drywall, which is made of recycled material. But many of the walls in the office's public spaces look nothing like everyday gypsum: They're made of compressed field straw. Anything from the building that can't be recycled ends up in the company's 956-cubic-foot trash compactor. One measure of Patagonia's commitment to recycling: It takes the company nine months to fill the compactor completely.

Earning With Natural Economics

The building makes an impressive environmental statement. But to succeed, Abeloe says, it must also make an impressive economic statement. "This is a business, and businesses need profits to survive," he says. "The less we make, the less we will have to give away, and the less other companies will think we have a mission that's worth imitating. So we didn't just do this for the sake of green marketing. We wanted to make sure that there would be a payback, and we didn't want to make any stupid mistakes."

Materials like the ones that Patagonia used can cost as much as 10% more than conventional materials, and they may take up to 20% longer to install. So, right from the start, Abeloe was hard-pressed to meet his building budget, which ended up exceeding $15 million -- the largest capital expenditure that the company has ever made.

But doing environmentally sensitive construction also means doing environmentally sound economic calculations. For Patagonia, that entails measuring the building's construction and operating costs over the course of the company's life cycle -- in much the same way that nature operates. To figure the return on investment of motion-sensitive lights, for example, Abeloe first establishes how much more money those lights cost than standard fluorescent lights. He then divides that number by the amount of energy saved by using the automatic lights. That ratio, applied against the cost of energy over time, gives him a measure of the payback period -- how long it will take for that feature to pay for itself and, ultimately, to produce savings.

Using these calculations, Abeloe figures that the environmentally friendly elements of the building will take two to eight years to pay for themselves -- just a fraction of the building's expected life span. The fact that there are no corporate or inventory taxes in Nevada doesn't hurt either: Patagonia saved at least $500,000 in 1997, its first full year in the facility, and the savings have only grown since then.

All of this has made Abeloe something of a guru in the logistics field. In the four years that the facility has been open, more than 1,000 people from more than 150 organizations, ranging from J.C. Penney to the Reno Fire Department, have visited for a tour. And most of those visitors tell him the same thing. "They say that their buildings need to show payback within 18 to 24 months," Abeloe says. "But a lot of these companies have been around for 100 years, and they all plan on being in business for at least 15 to 20 more. So, for a system that makes more sense ecologically, that pays for itself eventually, and that creates improvements for employees, why are they unwilling to accept a longer-term time horizon?"

Ron Lieber is a Fast Company senior writer. Contact Dave Abeloe by email (dave_abeloe@patagonia.com), or visit Patagonia on the Web (www.patagonia.com).