A British peer has been awarded a $1m prize for a lifetime’s achievement in the fields of philosophy and public service.

Onora O’Neill was commended by the judges, who awarded her the Berggruen prize, not only for the rigour of her philosophical work, but for her efforts to apply it to the real world.

They described the crossbench peer as “one of the most eminent moral philosophers in the world today” who had had “profound significance for the major public issues of our time”.

Lady O’Neill, a former principal of Newnham College, Cambridge, and chairwoman of the Equality and Human Rights Commission, has written books on justice, human rights and bioethics. She is an emeritus professor of philosophy at the University of Cambridge.

Speaking about the award, which includes the equivalent of £754,000, she said: “I’m not merely pleased, delighted and astonished to be awarded the prize, but particularly pleased that the thought is about the role of philosophy in the world.”

Her philosophical work has notably focused on the Kantian theory that promotes the moral duty to do what is right, rather than what produces a particular outcome.

“Professor O’Neill is also exceptional in combining pure theory – particularly, but not solely, of the Kantian kind – with its practical enactment. As a result, her service has been both intellectual and political,” the judges said.

The prize is awarded by the institute of the same name for improving “self-understanding in a world being rapidly transformed by profound social change”. O’Neill is the second recipient after Charles Taylor, a professor at McGill University, was given it last year.

Among other works, the judges cited the book based on her 2002 Reith lectures: A Question of Trust. It “distinguished between trust and trustworthiness in ways now important to debates on the political and other implications of new media”, the judges said.

They also referred to her work The Bounds of Justice, in which they said she “rejected the idea that the boundaries of nations set the bounds of our political and economic obligations”, as well as arguing that “national borders, too, must meet standards of justice”.

The Berggruen juror Amy Gutmann, who chaired the US Presidential Commission for the Study of Bioethical Issues, said: “One of the most striking aspects of Onora O’Neill’s work is that it combines philosophical rigour with timely prescriptions for what we really need to do to make the human condition better.”

Awarding O’Neill the prize, the judges said: “She has brought the resources of philosophy to bear on questions about hunger, medical and environmental ethics, and human rights, writing lucidly and accessibly about them in ways that have helped to guide policy.

“But she has also served the United Kingdom as the chair of its Equality and Human Rights Commission, as chair of the Nuffield Council on Bioethics, and as a member of the Human Genetics Advisory Commission, all of which play central roles in formulating and implementing just policy.”

They also cited her work as the president of the British Academy, the founding president of the British Philosophical Association and as the current president of the Society for Applied Philosophy.