This seems to be taking off in the UK far more than in the US, but instead of scratchy, eco-unfriendly fiberglass insulation, there is a growing movement of eco-friendly construction and one of the popular choices for insulation is wool.
That’s right, wool from sheep!
The first link in the post mentions that wool naturally absorbs and releases moisture but did not mention mold specifically. I did a bit of googling and found another wool insulation provider in the UK that has wool insulation treated to prevent mold growth: http://www.roof-solutions.co.uk/page_354815.html This particular product uses a resin bonding process so it's not as 'green' as the product in the original link, but basically it looks like you can find 'fully green' and 'mostly green' wool insulation :)
http://www.wannabehippy.com
Moisture and Wool
Wouldn't wool absorb moisture and possibly cause mold to start growing? I realize wool will dry out but other insulating products don't draw or attract moisture from the atmosphere. Would be interested in knowing.