Being a deep shade of green should be a condition of winning university funding, says a report which has been welcomed by John Gummer, environment secretary, and Gillian Shephard, education and employment secretary.
Funding councils should link money to environmental performance, and the Higher Education Quality Council should demand that undergraduate degrees include competence in "responsible global citizenship", says the report.
The document, commissioned by the two departments and the Welsh Office, reviews progress since a report three years ago by Peter Toyne, vice chancellor of Liverpool John Moores University. He called for universities to catch up with the outlook of both employers and students by greening themselves in their management and their curricula.
Professor Toyne, in a preface to this month's report, notes that universities and colleges have done very little since 1993: "The conclusion is stark and, for many, will be very disappointing."
Only one higher education institution and six further education institutions, out of a total of 756, reported that they were trying to get accreditation to a recognised environmental management standard such as the British standard BS 7750.
Professor Toyne blamed universities' inertia on pressures for university reform and on university time being taken up with "desperate problems of survival". "The plain fact is that we have been bombarded with one missive after another - from the Dearing inquiry, the CVCP, the funding councils and the research assessment exercise."
The new report, written by Shirley Ali Khan, a visiting academic at Middlesex University, aims to inject environmental issues into the new debates about higher education. The report calls for all university courses to be imbued with a green hue, in the form of a sense of responsible global citizenship.
Professor Toyne said there is increasing pressure from employers for "graduates with a sense of environmental responsibility".
Professor Toyne said: "I do not think that this is going to fall on deaf ears. The whole funding mechanism is up for grabs, as is the whole quality issue. This report has been very strongly billed by two secretaries of state."
Environmental Responsibility, A Review of the 1993 Toyne Report, HMSO, Pounds 14.