BMO Global Asset Management (BMO) will sell shares worth £20 million in companies including the Anglo-Australian mining giant BHP Billiton as part of efforts to tackle climate change.
One of the biggest divestments in fossil fuels linked to climate change ever, the Guardian claimed Archbishop Justin played a "crucial role" in the move, as president of BMO's responsible investment council.
Tom Viita, Christian Aid's Head of Advocacy, said: "Moving investment out of fossil fuels is a moral challenge of our times, so the Archbishop is using his influence to encourage an institution like BMO to ditch its holdings in companies which cause damage to our world.
"BMO's change of direction shows how fast the finance industry can move in response to the risks of climate change.
The £20 million formed part of BMO's portfolio of 'sustainable' funds, totalling £1.5 million. The firm's now banning all companies with fossil fuel reserves from being included in the portfolio.
The Church of England has already withdrawn its own investments from companies generating more than ten per cent of their revenue through fossil fuels.
BMO director Vicki Bakhshi was quoted by the Guardian as saying: "If all current known reserves are extracted and burnt, we know that the world would not meet the two degrees temperature limit established under the Paris Agreement.
"As such, we have come to the view that investment in companies with fossil fuel reserves is increasingly incompatible with the ethical and sustainability objectives of the responsible strategies range that we run."
Urging the Church of England to re-examine its own investment in fossil fuels, Tom Viita added: "When a major private company drops its fossil fuel investments for ethical reasons, one must ask whether The Church of England's policy is keeping pace.
"So far it has taken the approach that engagement with fossil fuel companies is the way forward, not divestment.
"With such a big investment company now taking the route of divestment, it may be time for the church to re-examine its current policy.
"Throughout history the church has been known for providing prophetic leadership on the big moral issues, and there is none bigger than that of climate change."
Premier has approached the Church of England for a comment.