This paper presents the development, calibration and finite element implementation of a novel set of phenomenological equations describing the effect of temperature and moisture on the stiffness, strength and toughness properties of fibre-reinforced plastics. An extension of the classical Zhurkov's kinetic approach is proposed to describe the effect of temperature and moisture on the ply-level matrix-dominated strength properties. The phenomenological equations are implemented into a finite-element simulation framework, consisting of a smeared crack approach for modelling intralaminar and translaminar failure, coupled with a bi-linear cohesive zone approach to describe delamination onset and progressive growth. The modelling approach is calibrated by means of experimental data in the open literature for the carbon-epoxy material IM7/8552. Validation case studies for the simulation strategy include quasi-isotropic short beam shear coupons and open-hole specimens subject to tension. It is demonstrated that the proposed simulation framework provides a comprehensive quantitative description of the role played by environmental effects in terms of development and interaction of intralaminar, interlaminar and translaminar damage processes.