The city has altered its investment policy to “include a focus on fossil fuel free and environmentally responsible investments”.

The step was sought by a member of Wodonga Albury Towards Climate Health, Bruce Key, who wanted the city to take a stand.   

 “I think it's just indicating that the average citizen would like to ensure everything possible is being done to move away from fossil fuels, because fossil fuels are a one-way street,” Mr Key said.

“There's an element of prudence in divesting from coal because coal looks like it's a one-way street going downhill.

“A few years ago shares in the world's largest coal company Peabody Energy were going for more than $1000, the last time I looked they were $2.

“Coal as a future type of investment doesn't strike me as very secure.”

The council has never invested directly in fossil fuel firms and as of December 31 last year, had $15.959 million invested in short term or at-call investments in Westpac, NAB, AMP Bank and ME Bank.

The returns are aimed at offsetting council loan costs.

Only one council depository, ME Bank, is a member of Responsible Investment Association Australasia, the peak industry body for ethical investors.

A council report noted “just making a statement to not invest directly in fossil fuel companies could be perceived to be a hollow statement when it does not result in any meaningful change in existing practices”.

Former mayor Mark Byatt backed the policy but said it had limited impact when major banks were not part of the peak body.

“I understand the intent of the policy and the action, however I'm not sure that council's approach alone will have substantial benefit as intended and there is a range of additional actions council can and is taking to support the environment,” Cr Byatt said.

Fellow former mayor Rodney Wangman, who moved the motion at the council's last meeting, said the move would be lasting.

“How do we want to see what is the legacy for our children, so we can't on one hand encourage the things we talk about in our strategic plan and then not back them up with the reality of day-to-day operations,” Cr Wangman said.

“This change, this suggestion actually helps us align those two things and report annually about how we're going.”

Eric Kerr acknowledged Albury was one of nearly 20 councils across Australia that had the policy.

“I'm very happy we can play catch-up and join them on this one,” Cr Kerr said.

“I think it is a very good strong Border message that we are both on the journey together.”

Michael Fraser said funds in alcohol, tobacco and gambling also needed scrutiny.

“I look at the impacts they have on our social environment and on our community today … I think they should also be included in this policy,” Cr Fraser said.