Social Sustainability for the Merino Wool Industry

Research from Cambridge Institute of Sustainability Leadership finds opportunities for wool value chain

Social sustainability could become a key market differentiator for Merino wool as the industry seeks to strengthen its position against synthetic alternatives, according to research from the Cambridge Institute of Sustainability Leadership.

From mid-2024 to early 2025, a group of multi-national professionals undertook an extensive study to understand social impact in the Merino wool value chain, specifically examining how positive impact can be maximised across its stakeholders. The conclusions come at an opportune time: while the global apparel industry, valued at over $1.7 trillion, drives trade and employment worldwide, natural fibre sectors face pressure to demonstrate their sustainability credentials against synthetic competitors.

Leveraging Wool’s Advantages

The study aimed to identify how the industry can build on wool’s inherent advantages while addressing operational challenges that affect long-term viability.

Twenty-two interviews were conducted with stakeholders based in ten different regions, including farmers, retailers, recyclers, and trade representatives. Using the UNEP Social Life Cycle Assessment framework, the research evaluated implications across 40 indicators.

The findings revealed that the Merino wool industry benefits from strong circular properties and natural sustainability advantages. But there is room for improvement: the research identifies four area of particular opportunity:

> Circularity

The circular properties of wool were noted as a recurring theme from the interviews. Wool’s biodegradable properties could shine through responsible disposal, recycling, and extended producer responsibility, the researchers found.

> Transparency

Transparency throughout the value chain fosters trust, promotes ethical practices, and facilitates equitable economic distribution – all reflecting positive social impact.

> Technology & Innovation

Technology is essential for enhancing farmers’ profitability and working conditions in addition to the ease it brings to traceability and provenance assurances.

The research emphasised the importance of ensuring that technological advancement supports rather than displaces employment, particularly in regional communities.

> Building Resilience

Strengthening the economic resilience of the wool industry requires supporting the viability of all participants in the value chain. This includes ensuring farmers have access to market information and technology that enhances their competitiveness in commodity markets, supporting innovation that expands wool’s applications, and fostering the rural communities and cultural heritage connected to wool production.

The Importance of Social Sustainability for Wool

As climate pressures intensify and markets demand greater transparency, ensuring fair wages, safe conditions, and community development will be essential for industry resilience. Moreover, wool can play a transformative role in sustainable fashion if social impact is placed at the heart of industry strategy, the research finds.

Although regulatory frameworks and certifications currently impose costly demands, they hold untapped potential to foster equitable practices, support upstream communities, and address global inequalities.

“This research validates what IWTO has long understood: that the social sustainability of our industry depends on supporting farmers and ensuring value for those who provide the raw material on which we rely,” says IWTO Secretary General Dalena White. “The findings provide a valuable framework for our members as we work collectively to address these challenges and demonstrate wool’s role as a truly sustainable fibre.”

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