Answer:
Wool comes from sheep.
Sheep need pasture and grasslands.
They also need water and other food.
Water has to be taken from rivers for them.
Forests may be cut down to provide grazing land.
After wool is cut it has to be transported, and cleaned, and processed, and weaved or knitted.
Every machine that touches it is run by electricity.
Most of the electricity will be from non-renewable sources.
Most living things have some kind of environmental impact. You just have to think carefully.