Parliament’s pension fund trustees are to reconsider the rules of their investments to take account of the risk of climate change, in a first for MPs’ finances.

While stopping short of a promise to fully divest from fossil fuels, the pledge by the trustees marks an important first step towards assessing and reducing the effect of the pension fund’s investments – which are ultimately paid for by the taxpayer – on climate change.

The move is a victory for a group of MPs from all parties who have long campaigned for changes that would stop the funds – which amount to more than £700m – being invested in companies that promote or benefit from fossil fuels, thus exerting economic pressure on them to reduce greenhouse gas emissions.

Caroline Lucas, the Green party MP who has been campaigning for reform of the fund, said: “Protecting the natural world is now humanity’s greatest mission, so this change of tack from the MPs’ pension fund is very welcome. It has taken four long years to get to this point, but the trustees finally now appear to accept that fossil fuels are a risky investment, both for savers and the planet, and this marks a significant change in policy.”

Around the world, the divestment campaign targeting investors with large holdings in fossil fuels has gathered pace in the last five years and won notable victories. Last week, Norway’s national oil fund began to refocus on renewable energy. About two-thirds of the UK’s university pension funds, as well as other public pension funds, have also either divested or reformed their rules, though some have retained their fossil fuel focus despite strong public pressure.

Other funds to have divested include the Irish infrastructure fund, the New York state pension fund, and in the UK local authorities including Waltham Forest and Southwark.

The pensions of MPs are looked after by the parliamentary contributions pensionfund (PCPF). The trustees have written to Lucas, in correspondence seen by the Guardian, to confirm they will reconsider the funding guidelines to recognise the risks from climate change.

The trustees have committed to asking their advisers to “prepare a climate change policy” and added that they “do wish to show ambition in this area”. They will formulate a responsible business plan, and by October update the statement of investment principles.

They also said divestment would be considered alongside the option of keeping fossil fuel shareholdings in order to have a “voice” on the future direction of those companies, to put pressure on the businesses involved.

Five of the top 20 investments made by the fund, representing more than £20m, are in fossil fuel companies including the UK-based BP, which makes up the biggest single shareholding by the fund. Others include Royal Dutch Shell of the UK and Netherlands, and the French company Total.

Last December, more than 200 serving and former MPs from all parties, spearheaded by Lucas, called on the PCPF to phase out fossil fuel investment.

Lord Deben, chair of the Committee on Climate Change and former Conservative environment secretary, called the trustees’ initiative a “positive step” and said the PCPF should follow scientific advice as the basis of its investment policies.

“The PCPF should now adopt a strategy that shifts investment towards companies driving innovation in low-carbon technology, and over time remove their investments from coal, oil and gas altogether,” he said. “Aligning investment with the 1.5C aspiration of the Paris agreement is the best way to protect our prosperity for many generations to come.”

Sir Ed Davey, the Liberal Democrat former secretary of state for climate change and energy, called on all pension funds to make the shift to investment in renewable energy and other low-carbon efforts. “All pension trustees ought to ensure their investments take account of climate risk, so it’s right parliament should take this initiative,” he said. “The best way is to switch funds from fossil fuels into clean technologies, as these are already highly profitable, but without the long-term carbon risk of oil, gas and coal.”

Moves to divest the MPs’ fund have faced opposition in the past. When Liz Truss, one of the names mooted as a possible leader of the Conservative party, was asked by the Guardian whether she supported such a move as environment secretary in 2015, she said she opposed it.