The Joseph Rowntree Charitable Trust has sold shares worth £1.9m in the mining giant Vedanta because it believes some of its activities in India are unethical.
The trust said it intended to sell all its shares in the company because of its plans to mine bauxite from a mountain in Lanjigarh and the Niyamgiri Hills, in the state of Orissa, which are sacred to the Kondh tribal people who live in the area.
Last week, the Church of England sold its shares in Vedanta for the same reason, and other third sector investors, including the Millfield House Foundation, have also sold theirs.
Susan Seymour, chair of the investment committee at the trust, said: "We were not convinced Vedanta was addressing shareholder concerns quickly enough to avoid destroying people's lives and creating irreversible damage to the environment.
"The company must realise that unless it makes significant changes soon, shareholders will continue to lose confidence in the company."
She said the charity followed an "activist model" in its investment strategy, trying to persuade companies to help further its charitable aims and selling shares in organisations that did not respond.
A Vedanta spokeswoman said: "Vedanta remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights.
"We work with a number of NGOs and with the authorities in India, the world's largest democracy, ensuring all our projects are conducted in compliance with the law and international best practice."