The Fossil Fuel Divestment Bill passed through the Republic of Ireland's lower house, the Dáil Éireann, with unanimous support on Thursday.
Once the bill passes through the upper house (Seanad Éireann) the country's €8 billion national investment fund will be required to sell all of its investments in coal, oil, gas and peat within five years.
As at June 2017, the Ireland Strategic Investment Fund's investments in the global fossil fuel industry amounted to €318 million across 150 companies globally.
Trócaire, a social justice organisation set up by the Catholic church in 1973, has lobbied for the passage of the bill.
"Today the Oireachtas [Ireland's parliament] has made a powerful statement. It has responded to the public’s call for leadership on this issue and sent a powerful signal to the international community about the need to speed up the phase out of fossil fuels if global climate goals are to be delivered," said Trócaire executive director Éamonn Meehan.
"It will stop public money being invested against the public interest, and it sends a clear signal nationally and globally that action on the climate crisis needs to be accelerated urgently, starting with the phase out of fossil fuels," Mr Meehan said.
