Australian Ethical managing director Phil Vernon has pledged the fund will divest from all fossil fuel industries. Australian Ethical capitulates on gas Over its its 30-year history, Australian Ethical has never been invested in traditional resources and divested from coal seam gas in 2011. However, the fund had previously maintained holdings in natural gas pipelines, arguing the industry was essential, while the global economy made the switch to renewable energy. "The rapidly declining cost of renewable energy means we are now confident that collapsing investment in natural gas would not push demand back to coal-fired power," Australian Ethical managing director Phil Vernon said. According to a recent United Nations report, the vast majority of newly-installed capacity in electricity generation globally last year was into renewable technologies, he said.

Australian Ethical quietly sold down its shares in Duet Group in December, meaning its local share portfolio is now compliant with the more radical fossil-free benchmark. The firm is still in the process of divesting holdings in four offshore gas pipeline operators that represent a combined 8 per cent of its international share portfolio. Mr Vernon said the sell down of these holdings was in progress and being managed to reduce financial losses to Australian Ethical clients. One security that represents 2.3 per cent of the fixed interest portfolio is "fairly illiquid" and will likely prove the most problematic exit to achieve. Campaign eclipses $3.1 billion

A spokesman for Hunter Hall said the firm has always had a smaller exposure to the fossil fuel sector than the benchmark index but had decided to divest completely in the face of climate science that shows burning fossil fuels is having a "powerful and accelerating impact" on climate and the environment. "The decision to end fossil fuel investments outright enables us to focus on a future with new opportunities," he said. Including the commitments from Australian Ethical and Hunter Hall, the Climate Advocacy Association now represents $3.1 billion of funds which, while tiny in context of the country's $2.6 trillion wealth management industry, reflects growing momentum for its cause. Many of the large industry super funds are already feeling the heat from members who have joined the #DivestFossilFuels social media campaign. A plethora of Twitter and Facebook accounts actively target particular funds. "The global divestment movement is growing apace and here in Australia we are seeing almost daily indications of its growing power and influence," Climate Advocacy Association spokesman John McKinnon said.

"It is increasingly clear that anyone involved in any form of financial or investment activity ignores it at their peril." Competing for the ethical customer Appealing to consumers who care about the social impact of how their savings are invested has helped Australian Ethical become one of the fastest growing "MySuper" providers in the market. MySuper products are the no-frills super funds that employers are allowed to nominate as the default fund for their workers. Winning more business through employers keen to demonstrate their credentials as a good corporate citizens is part of Australian Ethical's growth strategy. About 100 smaller employers send their default flows to Australian Ethical and Mr Vernon is hopeful that planned reforms to open up the market will help it win more accounts. "Divesting out of the fossil fuel sector is only part of the story for us," Mr Vernon said.