Last week the U.S. Securities & Exchange Commission (“SEC”) announced that it would be creating a new taskforce to focus on climate and environmental, social, and governance (“ESG”) enforcement. This focus reflects a growing trend of investors basing their decisions, at least in part, on the climate and environmental impacts of the companies and said companies’ ability to survive the increasing effects of global climate change. For this reason, the new SEC task force will focus on violations of Climate and ESG disclosure requirements, such as misrepresentations to the investing public as to a company’s sustainability efforts or environmental footprint.

This policy change is important for whistleblowers to be aware of because a corporation’s misleading statements on these subjects are now likely to be treated as material by the SEC and may actually be prosecuted. Corporate insiders, i.e.,whistleblowers, are well-positioned to report to the SEC when they know that a company’s statements about climate and ESG are false or designed to be misleading.

Whistleblowers are a crucial source of information and evidence, providing a window into the opaque and sophisticated worlds of corporate inner workings and criminal networks, which law enforcement would otherwise not have. In this way, whistleblowers are our best hope for holding corporations to their environmental promises through such reporting. Now, the SEC may actually take action on such reports, and whistleblowers will enjoy the safeguards that come with reporting to the SEC, such as anti-retaliation protection, anonymity, and awards.

This announcement also comes on the coattails of a recent SEC decision stating that corporations such as Citigroup Inc. and Exxon Mobil Corp. cannot block shareholders from voting on resolutions tied to climate change. This decision allows the shareholders of a corporation to effectively force the corporation to report on topics such as how its lobbying activities are aligned with global efforts to fight global warming. Should such reports be misleading, the SEC has now signaled its intent to hold such corporations accountable.

Additionally, the SEC recently stated its intention to undertake a review of implementing climate disclosure requirementsfor U.S.-listed corporations, potentially increasing formal disclosure requirements related to climate change. Such a requirement is an important step in both fighting climate change and making the markets more predictable. This step by the SEC is also particularly timely because the EU has similarly announced its intention to overhaul its climate-related disclosure requirement this year and has already created new sustainable finance disclosure requirements for investment firms and fund managers.

The SEC should look to harmonize any new requirements for U.S. companies with the EU rules. Corporations and whistleblowers worldwide could then easily and accurately determine what types of disclosures are required by law, and nonconforming corporations can be held accountable.