Camapigners are calling for an investigation into a council's policy on ethical investment.
The Green Party said Brighton and Hove City Council's commitment to peace, the environment and public health was being undermined because of investments in companies with dubious records.
Greens want a scrutiny panel to investigate whether the authority's four-year-old statement on ethics is working and whether it should be given more teeth.
They acted after The Argus revealed the East Sussex pension Fund was investing in the tobacco and arms industries and companies with poor environmental and social records.
The council is one of 50 members of the fund, which is administered by East Sussex County Council and invests pension money for all local authorities in the county.
The council's ethical statement is aimed at its own direct investments but Greens said it should use its influence as a member to insist the fund reviews where pensioner's money goes.
Green councillor Pete West said Brighton and Hove was a Peace Messenger city and it was totally hypocritical for money to be invested in arms manufacturers.
He said: "I don't think Brighton and Hove's public money should be invested in unethical and unsustainable organisations.
"It is completely contrary to the council's stated policies and I would say against the wishes of most ordinary people."
The stance was backed by trade union Unison. Andy Richards, who chairs the Brighton and Hove City Council branch, said many members were concerned about where their pension money was being invested.
He said: "A lot of our members have been asking questions about where money is invested so we would welcome a scrutiny process and the chance to have a say."
Senior Labour councillor Brian Fitch said: "I support further investigation.
"The plight of children in the Third World and the exploitation is horrendous and it would be a tragedy if working people in Brighton and Hove and East Sussex added to that."
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