In the wake of a building collapse in Bangladesh that killed at least 1,127 garment workers, a group of Western retailers on Monday pledged to avoid substandard factories and the government opened the door to easier formation of unions.

The question is whether companies and government officials will pay more than lip service to improving standards in Bangladesh, where clothing exports have been booming.

A handful of major apparel companies committed to a ground-breaking five-year accord on safety standards in Bangladeshi factories on Monday. Hennes & Mauritz AB (HM-B.SK), Inditex (ITX.MC), Tesco PLC (TSCO.LN), C&A, Calvin Klein parent PVH Corp. (PVH), German retailer Tchibo and Primark, a European budget fashion chain owned by Associated British Foods (ABF.LN), all said they signed the legally binding agreement, which prohibits retailers from manufacturing at factories that fail to meet safety standards and commits them to pay for necessary repairs and renovations.

In addition, Italian retailer Benetton, whose order forms were found in the rubble of the collapsed Rana Plaza factory, is strongly considering signing the agreement, according to a person close to the company. However, Mango, which was also producing clothes at Rana Plaza, hasn't yet signed it.

The accord calls for the appointment of a safety chief to inspect Bangladesh's 5,000 garment factories and establishes fire-safety training for workers.

Separately, activists are pressing some Western retailers to contribute more than $70 million to a fund that would compensate victims of the factory collapse.

Meanwhile, Bangladesh said its garment workers would be allowed to form unions without seeking permission from factory owners, a decision welcomed by rights groups as a change that could save lives--if backed up by rigorous enforcement.

The collapse on April 24 of the eight-story Rana Plaza, one of the world's worst industrial accidents, has put pressure on Prime Minister Sheikh Hasina's government to address concerns about working conditions in Bangladesh, whose garment industry has grown rapidly, thanks to low wages. Ms. Hasina's administration said on Sunday that it planned to soon raise the minimum wage in the sector from $38 per month, a quarter of China's wage. It closed 18 garment factories for safety violations last week, including three belonging to the country's top garment manufacturer, and is planning broad inspections of other facilities in a country with some 5,000 garment factories.

The salvage operation at the disaster site wound down on Monday, the first day in which workers didn't find a corpse. For most of the previous week, army personnel leading the cleanup found around 100 dead bodies each day.

The companies signing the binding agreement were among about 20 retailers, working with workers-rights groups, labor unions, nongovernment organizations and the International Labor Organization, involved in drafting the accord in Germany two weeks ago, following the Rana Plaza factory collapse outside Dhaka. The meeting set Tuesday as the deadline to sign the pact. More retailers could announce their participation in the accord this week, the organizations said.

The agreement is intended to become the cornerstone of a plethora of efforts to improve working conditions in Bangladesh's $20 billion garment industry.

The participation of H&M, C&A, Primark and Inditex, the Spanish parent company of Zara, is intended to increase pressure on other retailers to sign.

"In order to make an impact and be sustainable it would need a broad coalition of brands," H&M said in a statement. Some of the world's biggest retailers, including Wal-Mart Stores Inc. (WMT), which was represented at the meeting in Germany, haven't yet given their positions on the accord.

Labor groups say that Wal-Mart, which has operated a sourcing office in Bangladesh for at least a decade and is one of its largest customers, has long resisted the legally binding agreement.

The retail giant has preferred to implement its own safety programs in the country, such as a recent $1.6 million donation to an American NGO to launch an environmental health and safety academy there.

A spokesman for Wal-Mart said the company had nothing to announce right now on the industry-wide agreement.

He said Wal-Mart would continue to work with industry groups, suppliers and the Bangladesh government "to come to an appropriate resolution on this matter and develop broad-based solutions for the industry."

Another large American retailer, Sears Holdings Corp. (SHLD), said it is still evaluating the accord.

Bangladesh is one of the world's largest clothing exporters, but workers' rights groups say factories cut corners on everything from safety to wages to keep costs down in order to attract orders.

"It is now time for companies to move beyond vague promises, business-as-usual self-regulatory schemes and rhetoric," said Ineke Zeldenrust, director of Clean Clothes Campaign, a garment workers-rights group that helped hammer out the accord.

--Tripti Lahiri and Shelly Banjo contributed to this article.

Write to Christina Passariello at christina.passariello@wsj.com and Syed Zain Al-Mahmood at zain.syed@dowjones.com