Confidential correspondence between senior Monash University executives shows a secretive attitude on how much money the university is making from fossil fuel investments.

The Victorian university says it is committed to reducing its carbon emissions, and Monash scientists were among the first to alert the world to global warming.

But one of them, David Karoly, a lead author for the Intergovernmental Panel on Climate Change (IPCC), says the university is also betting on the survival of the very industries driving the looming crisis.

"All universities, including Monash and Melbourne where I am now, need to take extremely seriously their investments in fossil fuels, which are really supporting an industry which is causing damage to the climate," he said.

As its students call for divestment of fossil fuel stocks, private correspondence between Monash's chief financial officer and its vice-chancellor reveals a fortress attitude over its $400 million investment portfolio.

Former Liberal Party leader John Hewson recently sent the world's top 300 universities detailed questionnaires about their investment decisions in order to rate their response to climate risk.

Monash's chief financial officer David Pitt inadvertently sent Dr Hewson the advice he privately gave his vice-chancellor.

"My recommendation is that we let this through to the keeper," he said in an email.

"To pursue this would involve or imply 'unbundling' of our investment activities...and we might not score well anyway.

"Better not to respond so this group would have to rely on public information and we would simply be in a position to say that we are unaware of their scoring and did not participate."

Dr Hewson says he was surprised by the content of the email.

"The response (from Monash) seemed to be firstly, 'Let's not be part of this. Let's just ignore it, push it aside it will go away'," he said.

"How do they defend running that sort of risk?

"Let's assume that tomorrow there is a catastrophic - series of catastrophic climate events which dramatically affects the value of some of their investments, the share prices collapse.

"People say 'oh it can't happen, I heard that all the way throughout 2007 when funds I was associated with were getting out of the stock market thinking well the market's going down 50 per cent' - everyone's telling us they couldn't.

"All the asset managers were telling us 'oh no the market's not going to go down'.

"At some point you cannot go on defending the indefensible. At some point you are going to have to say 'whoops, there is a risk here'."

Large asset owners join Dr Hewson's survey

Some of the largest asset owners in the world, including AXA Group, CalPERS and ASL are working with Dr Hewson's Asset Owners Disclosure Project, which is ranking the top 1,000 super and wealth funds on how they are responding to climate change.

Dr Hewson is urging them to move some of their combined $80 trillion out of fossil fuels and into low carbon alternatives or risk a shock far greater than the global financial crisis of 2008.

He recently added the world's top 300 universities to his list.

Monash has not revealed where it invests its money.

But if it follows a similar pattern to other funds then about half of its $400 million will be in carbon-intensive stocks like oil, gas and coal, with only about 2 per cent in low-carbon assets.

In a written statement, the university says it has not made a final decision on whether or not to take part in the survey and it will be watching the decisions of other Australian and international research-intensive universities.

Professor Karoly says the university must take action.

"It is critically important that Monash University, like all universities, walk the walk as well as just talking the talk," he said.

"Yet Monash University is being seen to do only the things that are easy."

"They're avoiding the difficult decisions about divesting."

Other universities may not take part in survey

The private advice from Monash CFO David Pitt also implies that most of Australia's eight large universities will not be taking part in Dr Hewson's survey.

"We have discussed this area at a recent Go8 CFO meeting and most have not entertained letting others judge their efforts in this way," Mr Pitt said in the email.

Even Britain's Oxford University has turned Dr Hewson down.

This is while one of its leading economists, Ben Caldecott, is warning Australians to expect unprecedented falls in the future value of coal and other fossil fuels.

He says demand for coal will peak as early as 2016, so the expansion of exports is a very poor financial strategy.

"All these other things make expanding coal output a pretty bad idea and a risky strategy and when you add climate change, ridiculous really," he said.

"There has been a confluence of new risks coming together, all of which are related to the environment.

"You can take value destruction above and beyond what we've seen before."

Coal has a rosy future: Minerals Council

Dr Hewson is surprised by the universities' lack of action.

"They're at the cutting edge of knowledge, supposed to be leading the community in sort of educational frontiers and so on and you would think that you might find a more sympathetic and substantial response to the risk of climate change," he said.

Australia's Minerals Council CEO Brendan Pearson rejects the comments.

"It's really an anti-coal campaign dressed up as investment advice," he said.

"I think we should see it for what it is and I think investors will look at the cold, hard facts.

"Coal has a bright future. The International Energy Association chief economist said not just the other day that coal has a rosy future for a long time to come."