This paper investigates the effect of moisture content upon the degradation behaviour of composite materials. A coupled phase field framework considering moisture diffusion, hygroscopic expansion, and fracture behaviour is developed. This multi-physics framework is used to explore the damage evolution of composite materials, spanning the micro-, meso- and macro-scales. The micro-scale unit-cell model shows how the mismatch between the hygroscopic expansion of fibre and matrix leads to interface debonding. From the meso-scale ply-level model, we learn that the distribution of fibres has a minor influence on the material properties, while increasing moisture content facilitates interface debonding. The macro-scale laminate-level model shows that moisture induces a higher degree of damage on the longitudinal ply relative to the transverse ply. This work opens a new avenue to understand and predict environmentally assisted degradation in composite materials.