Kemi Badenoch has hit out at pro-trans group Stonewall, demanding the government stops listening to trans activist groups.
She accused activist groups of posing as neutral charities to influence government, saying Stonewall "overreached" with its influence.
WATCH: Badenoch addresses the Arc Conference in London
Badenoch urged the Government to have more "confidence" in itself, instead of relying on activists to "mark its homework".
Speaking about trans issues, the Business Secretary and Minister for Women and Equalities said: "Government does need to do a little bit more.
"And it's about challenging activist groups that take over institutions that should be neutral.
"We started going down the wrong track on gender ideology because we allowed other people to start telling the Government what to do. Ideas that came from leftist parts of the academy feeding into particular charities.
"Stonewall is the best example of this. It's not the only one. It started advising the Government, saying, 'this is what you need to do in order to serve a particular community'.
"And then it overreached and it started giving people legal advice - or advice that was certainly different to what the Equality Act said.
"Government needs to be more confident in itself, rather than ask other people to mark our homework in order to be on Stonewall's top 100 list.
"That's when things start to go wrong.
"I think we were able to turn the tide once we stopped being informed by people who had an agenda, pretending to be neutral, pretending to be charities - rather than activist organisations.
"And I think that's the template that should be followed."
Badenoch's speech also saw her hit out at "woke capitalism", accusing British businesses of "virtue signalling".
She told delegates at the London conference: "Something weird is happening, because businesses are now competing over who can now signal the most virtue as a way of generating investment."
Badenoch made the comments at the Arc Conference in London.
Arc was established as "an international community with a vision for a better world".
Addressing the conference on Monday, Tory MP Miriam Cates issued a stark warning over "economic stagnation" and "destabilizing mass immigration", both of which she said could result from the fertility decline seen by the West.
Peterson said that "concerns about identity" will lead to a "pathway that's marked out by nothing but...self-serving hedonism".
He also used his speech to ask delegates: "How do we tilt the world uphill rather than downhill?", rejecting a declinist vision of the world.
A spokesperson for Stonewall told GB News: "Through our Diversity Champions programme Stonewall provides expert guidance to employers, based on leading practice from Stonewall and hundreds of employers we work with to make sure LGBTQ+ people are supported to thrive at work.
"Organisations are free to implement our guidance and make it work for their contexts. It is not a question of right or left-wing thinking to unlock the potential of LGBTQ+ employees.
"We have never professed to offer legal advice and it is important to represent our work accurately."