Arguments over “silly things like pronouns” are preventing the UK from dealing with challenges such as falling prosperity and the rise of China, Kemi Badenoch has said.

The Business Secretary told a conference in London on Wednesday that businesses and individuals should remain focused on their “core purposes” if the UK is to meet the demands of an increasingly multipolar world.

She said: “I don’t think that things are as bad as others do, but I do think we are on the cusp.

“There is an inflexion point coming and we need to be very focused and figure out how we are going to get ourselves into a good place.

“And that means not being distracted by all sorts of silly things like pronouns and what critical race theory is saying and measuring people’s skin colour and so on.

“All of these things are distractions and whenever I see too much invested in those sorts of things it means that companies and individuals are not dealing with their core purposes and that is why I am sceptical about so many of those things.”

Ms Badenoch, who also acts as equalities minister, made her comments during a conference organised by the Alliance for Responsible Citizenship, which has brought together right-wing figures from across the world for a three-day event to discuss the direction of conservatism.

She added that focusing on subjects such as diversity and inclusion was partly to blame for weak economic growth.

Saying there was now a “fear” of entrepreneurialism and an emphasis on avoiding negative experiences, Ms Badenoch said: “Something weird is happening, and that is that in a low growth environment, businesses are now competing not on who can make the most profit but who can signal the most virtue and hope that is a way of generating investment.

“You see that manifest itself in things like ESG (environment, social and governance investing) that’s not actually doing ESG, and DEI (diversity, equity and inclusion) that’s not actually doing DEI.”

Her comments followed a speech at the same conference on Tuesday by Michael Gove, who criticised the use of ESG and DEI policies by large corporations, claiming they were using such policies as a “shield” against resentment caused by their accumulation of wealth.

The Communities Secretary, who previously backed Ms Badenoch for the Conservative leadership, also criticised the accumulation of wealth for its own sake as “immoral” and said corporations had failed to demonstrate “proper stewardship” of their assets, instead focusing on maximising returns.