One Teaspoon and Australian Fashion Labels have confirmed cashmere will not appear in future collections.
The move follows a PETA Asia video exposé exposing cruel practices in China and Mongolia, which produce 90% of the world's cashmere.
The extreme footage shows workers mistreating goats to harvest their hair for cashmere.
Australian Fashion Labels' portfolio includes the labels Finders Keepers, C/MEO Collective, Keepsake the Label, The Fifth Label, and Jaggar the Label.
PETA spokesperson Emily Rice praised the ban.
"By committing to policies banning cashmere from future collections, both Australian Fashion Labels and One Teaspoon have made not only a compassionate decision but also a savvy business move.
"Nowadays, consumers are looking to buy from ethical brands that are kind to animals – and the planet."
Upon viewing the video footage, One Teaspoon thanked PETA for bringing this issue to its attention, vowing never to use cashmere in its future designs.
Australian Fashion Labels and One Teaspoon join a growing number of fashion labels around the world that have turned their backs on cashmere, including H&M, ASOS, and Scotch and Soda.