“The National Tertiary Education Union, the University of Sydney Union, Greenpeace and the indigenous community believe the investment contradicts the university's ethical investment policy,” the ABC reported.
The university was also criticised over claims that Whitehaven’s Maules Creek project in the Gunnedah Basin, New South Wales, will damage indigenous cultural areas.
"A university like Sydney University promotes itself as green and ethical," Greenpeace spokesman Nikola Casule reportedly said.
"They generally promote a green image, so for them to live up to that, today we're calling on the vice chancellor, Michael Spence, to sell all shares in this coal company."
University of Sydney responded by saying it took environmental and social responsibilities seriously.
"Our portfolio is under constant review to ensure our social, environmental and governance responsibilities are balanced with our responsibilities to students, staff and donors," it said.
In a staged photo, Greenpeace Australia Pacific CEO David Ritter, NTEU University of Sydney Branch president Michael Thomson and Fossil Free student representative Clo Schofield each held a printed sign saying “smart uni, dumb investment” outside a University of Sydney building.