Guy Opperman, the pensions minister, said that firms that pay staff well and take account of the "social impact" of their activities should be recognised and praised, to encourage the spread of what he called "responsible capitalism".
Opperman was speaking at the launch of a Social Market Foundation paper on "social business" written by Phillip Ullmann of the Cordant Group, one of Britain's biggest social enterprises.
The paper, From Mission to Impact argues that companies should have a legal duty to pursue a "social mission" to benefit workers and other stakeholders as well as owners.
Mr Opperman, who was speaking in a personal capacity, said companies that demonstrate social impact should be celebrated and rewarded by consumers.
He said: "Just as there is a Queen's Award for Enterprise for exporters, there is a case for looking at whether there should be a Queen's Award for Enlightened Business Behaviour. That would be a legitimate validation of social business."
The Queen's Award for Enterprise is a Government award given to British firms judged to excel at exporting or innovation. Winners are invited to a Royal reception and are entitled to fly the Queen's Award flag at their offices.
Mr Opperman, one of the first Conservatives to campaign for a "living wage", helped to set up a community-owned bank in his Northumberland constituency. He said he believed there is a "social change" underway that puts pressure on companies to change the way they work.
He said: "There are businesses aplenty that are setting an example - Timpson's, the Co-Operative, Lush and Phillip Ullmann's business, Cordant. There are role models of the sort of business people want to see in future."
Cordant, which has a turnover of £850 million a year, has declared itself a "social enterprise", capping executive pay and dividend payments and promising to share profits with staff.
Phillip Ullmann, Chief Energiser, Cordant Group said: "I believe that social business can change society, improving the lives of workers everywhere providing we can instil a cultural shift in thinking from profits to people and from pure wealth accumulation to wellbeing. The key lies in making real social impact promises, providing employee autonomy and in holding companies to account so that any license to operaterestsondeliveringgenuine, lastingchange."
James Kirkup, Director of the Social Market Foundation, said: "Restoring faith in an open market economy requires companies to do things very differently. Politicians and business leaders are increasingly realising that the issues raised by people like Phillip Ullmann's SMF paper should be at the centre of debate about our economic and social future."
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