The decision by the University of NSW to retain its $50 million investments in fossil fuel-related businesses has been dubbed "a complete failure of leadership" by divestment activists.

Outgoing vice chancellor Fred Hilmer said in a statement on Monday that UNSW's University Council had "resolved overwhelmingly" to hold on to the fossil fuel assets, held indirectly as part of the institution's $309 million holdings.

The fossil fuel debate continues on campuses. Credit:Robert Rough

Mr Hilmer said UNSW takes "very seriously the issue of greenhouse gas emissions and global warming", and had been a significant contributor over the decades in research into low-carbon alternatives, particularly solar energy.

Working closely with industry and government would "have greater impact in addressing climate change...than via token political actions," Mr Hilder said.