Why is Cambridge University dragging its feet on divestment?

How much time does it take to change investment policy at a university? Why do Cambridge university students need to go on hunger strike and occupy university office buildings to pressure the university to action? Back in January last year, after a vociferous campaign by students and academics the soverign body of the university ruled that ‘none of the University’s Endowment Funds should be invested directly or indirectly in companies whose business is wholly or substantially concerned with the extraction of fossil fuels.’ They also required the university council to publish a report within twelve months to set out how this should be done. It actually took a bit longer than that but earlier this month a report was produced (5 Mb pdf) and the recommendations in it, while not earth shattering, are a step in the right direction. However, even this is apparently a step too fast because the council are unable to agree to adopt even those recommendations. These include:

1. No investment in tar sands or thermal coal (? What other kind of coal is there?)
2. Commitment to the principles of the UNPRI (United Nations Principles of Responsible Investment)
3. 10% of the fund to be invested in dedicated environmental, social and governance (ESG) funds

The first of these is only sensible given the current market. The second does not actually commit them to anything much as the principles are aspirational. The last one is a positive step but 10% is not very much and there is no timescale for its implementation.

The university endowment fund is worth almost £3 billion. (£2,959m as of June 30th 2017). However, much of this is invested indirectly via externally managed investment funds and consequently the University Investment Office team (a total of 9 people) do not have direct control. Apparently, switching to funds that avoid fossil fuels is difficult because 'it is necessary to take time to build up these relationships' (with the third party fund managers). It seems to me that for a customer worth £3 billion those relationships should be flexible and responsive.

Nowhere in the report does the working group argue that divestment is a bad thing. They agree with the view from the Zero Carbon Society that 'Divestment is the best way to protect the University’s finances from the ‘carbon bubble’. A combination of mitigation policies and falling renewable energy prices is predicted to turn fossil fuels into ‘stranded assets’ in coming decades.' Also the argument that retaining investments allows the University to influencing fossil fuel companies via the board of directors falls down - as the group admits - because most of the investments are indirect through 3rd party funds.

So is the university council really stalling on this issue because it does not have sufficient control of its investments? Or are there other reasons that are not being talked about in public. The director of finance, David Hughes, comes to the University from Shell. I know a few people who have previously worked in the oil industry and they are not all pro fossil fuels in their current lives so one should not leap to conclusions there. I have also heard it suggested there is a concern that research funding from fossil fuel companies could be at risk. For example, Shell (along with NERC and DECC, now BEIS) are supporting a project investigating the long term storage of CO2 in geological formations. Would they withdraw funding if Cambridge divested? I can see no rational reason for them to do so. The work needs doing and Cambridge has been selected as the best partner to deliver it.

So why is Cambridge University dragging its feet on this? I remain baffled.