The launch of the new ethical policy was handled by Lansons, which has been advising the Co-op bank since March 2013 and has been handling its external communications since December 2013.
Following a consultation with 74,000 customers and employees, the bank has extended the list of companies it will not finance to include those involved in irresponsible gambling and pay-day loans as well as companies that avoid tax. Eighty per cent of those surveyed said "not lending customers’ money to businesses that go against our ethical concerns" best demonstrated the bank’s ethical policy.
The bank says it will continue to refuse to finance businesses that flout its values in areas such as human rights, the environment, international development and animal welfare.
The policy overhaul follows a period of crisis for the former mutual after it made a loss of £2.49bn in 2013, which meant it had to be bailed out twice by a consortium of investors including a group of hedge funds.
The damage to the bank's reputation was compounded when its chairman Paul Flowers was caught on film buying illegal drugs.
The bank estimates that as a result of the crises it lost 40,000 customers last year alone.
The Co-op was the first bank to introduce an ethical policy in 1992 and this ‘higher purpose’ has formed the basis of its competitive positioning and differentiation from rivals in the finance industry ever since.
Niall Booker, chief executive of The Co-operative Bank, said higher purpose was a key part of the Co-op's competitive positioning and that the bank needed to retain that edge.
He added: "Our values and ethics have always been an important factor that both underpins our business and distinguishes us in the marketplace. Today we are recommitting to our ethical policy and, at the same time, strengthening and expanding it to bring the policy into line with what our customers care about today. We know that we still have much more to do to get the bank back on track and we know we have made our share of mistakes in the past, but the relaunch of this policy is an important step in rebuilding The Co-operative Bank as we listen to our customers and rebuild trust."
Booker said the company had also taken more technical measures to shore up its position, including strengthening the bank’s capital and liquidity, simplifying the business and focusing on individual and small business customers.
The launch of the new ethical policy was handled by Lansons which has been advising the Co-op bank since March 2013 and has been handling its external communications since December 2013.