due to their sensitivity to environmental conditions, what it closely monitored. If their populations decline, it's a sign that something is going wrong in the environment?

Yes

Explanation:

If a population is extremely sensitive to environmental conditions, even a small change in the environment can spell disaster for the population.

If a population declines suddenly and the only changes noted have been environmental fluctuations, the cause of the decline is most likely associated with these conditions.

Sudden changes in environmentally sensitive populations can be indicators of environmental problems that go beyond the species in question.