The head of the Australian National University has defended a decision to dump certain resources stocks from the university's $1 billion investment portfolio on ethical grounds, saying fossil fuel-reliant companies will not survive the next 20 to 30 years unless they diversify into new energies.

ANU Vice-Chancellor Professor Ian Young said he was surprised by the "disproportionate" nature of the vitriolic response to the divestment announcement and said it was worrying certain groups felt they had the right to "tell an investor how to invest".

The ANU offloaded shares worth $16 million worth in seven resources companies, including oil and gas producer Santos, Iluka Resources and Oil Search, representing less than 2% of its $1.1 billion portfolio.

But miners and their industry bodies, such as the Minerals Council of Australia, a federal assistant minister and South Australian Premier Jay Weatherill all lined up last week to pour scorn on ANU's decision.

Assistant Infrastructure Minister Jamie Briggs called it "reckless" and urged the university to reverse its decision.

ANU is the first Australian university to divest from fossil fuels but in the United States 19 universities have sold out of investments deemed unethical or a risk to the environment, including the prestigious Stanford University, which has purged its $US19 billion ($22 billion) investment fund. ANU modelled its socially responsible investment policy on that of Stanford.

Professor Young said there had been a "torrent of support" from students and the wider community.

"They have been saying 'don't back down'," he said. "There is tremendous enthusiasm out there around environmental issues and investment."

ANU Student Association president Cam Wilson said 82% of 2000 students polled before the university made its decision supported divestment.

In an opinion piece written for Fairfax Media, Professor Young, whose ocean research has resulted in his consulting to a range offshore gas and oil companies, questioned the short-term thinking of the divestment critics.

"What will our industries be in 20 or 30 years' time?" he writes. "I am confident they will not be in producing fossil fuels."

He told Fairfax Media: "I don't think fossil fuels will be a big part of the world economy in 20 to 30 years' time. But, that said, there is a big opportunity for these companies to change the mix of what they produce."

While seven resources stocks were dumped, ANU has retained investments in mining groups BHP Billiton and Rio Tinto, as well as in Woodside Petroleum and Wesfarmers.

Professor Young said those groups were more diversified and showed signs of evolving to new energy sources in future.

"Australia should not just be an adopter of alternative energy, we should be a producer," he wrote. "I have often said the real debate in climate should be about producing cost-effective alternative energy. Sticking our collective heads in the sand and ignoring a changing world will ensure we do destroy jobs.

"Universities like ANU should be the powerhouses to produce the new technologies for such a world.

"The university has a responsibility to invest wisely but also in a manner consistent with the desires of our stakeholder students, alumni and staff.

"There has been growing sentiment from our community to not just get a good financial return from our investments but also to invest in companies which would have activities consistent with the goals of the university, and do not manifestly cause social harm.

"For instance, the university for many years has not, and would not now, invest in tobacco."

He said ANU did not invest in beer and wine companies to his knowledge.