We often mistake mere outward moral reform for sanctification.
Sanctification is “the work of God’s free grace whereby we are renewed in the whole man after the image of God, and are enabled more and more to die unto sin, and live unto righteousness” (The Westminster Shorter Catechism, Q.35).
Mere outward morality is fine as far as it goes, but it does not go nearly far enough. Unlike sanctification, it is not the work of God’s free grace. In fact, it may actually be antithetical to God’s grace. Unlike sanctification, it does not involve the renewal of the whole man, but leaves the inward man completely unchanged. And unlike sanctification, mere outward moral reform does nothing to enable us to truly die to sin and to live unto righteousness.
Louis Berkhof writes,
A man may boast of great moral improvement, and yet be an utter stranger to sanctification. The Bible does not urge moral improvement pure and simple, but moral improvement in relation to God, for God’s sake, and with a view to the service of God. (Systematic Theology, p.532)
So while you cannot have sanctification without moral improvement, you most certainly can have moral improvement without even the slightest trace of sanctification.
Charles Hodge goes so far as to say,
“The two things differ in nature as much as a clean heart from clean clothes. Such external reformation may leave a man’s inward character in the sight of God unchanged. He may remain destitute of love to God, of faith in Christ, and of all holy exercises or affections. (Systematic Theology, Vol. III, p.214)
Sanctification is the gracious, unmerited (although not without effort on our part!) renewal of the whole man, making believers more and more conformed to the image of Jesus Christ. It is the gracious, ongoing renewal of our hearts and minds, our thoughts, words, and deeds.