I just discovered this thread and thought I would add a couple of comments.
For wool fabrics my geographic location is quite an advantage when it comes to looking for ethical sources.
I live in New Zealand so I can very easily source merino wool fabrics where every step of the fabric manufacture process has occurred domestically. It won’t always be organic fibre but even regular sheep farming and wool fabric manufacturing here is of an ethical standard that I am comfortable with.
For those of you in the USA… The Fabric Store now has a shop in Los Angeles and from what I understand they stock quite a good range of New Zealand merino fabrics. If they are anything like their equivalent stores here in New Zealand then you can call/email them and the staff will pop some free fabric swatches in the post for you based on what you’re looking for. Then they will post you the full yardage you need once you’ve decided which fabrics to buy.
The Fabric Store LA
Oh and they have stores in Australia now too!
They have really good sales near the end of each season where almost all of their fabrics will be 50% off. I always take this opportunity to stock up on some merino fabric and my girls get to keep cosy and comfortable all winter long in home made (and ethical!) merino clothing. The playtime dress/tunic is my favourite Oliver + S pattern to make up in merino jersey.