Cardiff councillors voted almost unanimously to transfer around £200 million into a fund tracking the Global Low Carbon Index and to divest the rest of their pension fund from fossil fuels within a five year timeframe.
Last year Monmouthshire council became the first council in Wales to vote to divest its pension fund from fossil fuel companies.
Previous research by Friends of the Earth found that the eight local authority pension funds in Wales invested over £1billion between them in fossil fuel companies.
Bleddyn Lake, Friends of the Earth Cymru spokesperson, said: "After years of lobbying by Friends of the Earth, it’s fantastic to see Cardiff councillors taking the historic decision to stop supporting the fossil fuel companies that are fuelling the climate crisis.
“Now it’s time for all the local authority pension funds in Wales to follow Cardiff’s lead. Too many have been hiding away from taking meaningful action, preferring to hide behind so called ‘engagement’ with these companies.
"If a climate emergency is to mean anything then we simply cannot afford to be investing money in the very companies which are driving climate change. Research has shown that divesting from fossil fuel companies is actually better financially too and will minimise future financial risks for those with pensions in these funds.
“Climate change is the challenge of our age. We can’t afford to push action further down the road all the time or expect others to be the ones to sort out this mess.
“We want to see the Wales Pension Partnership, the Welsh Assembly, the Welsh Government and all other public body pension funds ditch fossil fuel investments and we will be keeping the pressure up until they do the right thing, both for the planet and for future generations here in Wales and around the world.
Marianne Brooker is The Ecologist's content editor. This article is based on a press release from Friends of the Earth.
Image: Elliot Brown, Flickr.