The Securities and Exchange Commission’s (SEC) proposed rules on climate-related disclosure are facing pushback from financial services providers and Congress, over claims that the onus should be on companies to determine how ESG applies to them.

In March, the SEC revealed its landmark climate change disclosure policy, which would require U.S. issuers to disclose Scope 1 and 2 emissions data and report on Scope 3 emissions, which arise from their value chains, where such reporting is considered to be material.

Under the proposed policy, companies would also be expected to disclose how they maintain oversight and governance of climate-related risks.

In a Tuesday letter, Nasdaq urged the U.S. regulator to amend the rule, arguing that companies should have the “flexibility” to determine what constitutes a material ESG issue.

“We are concerned that the proposal would impose additional complexity, costs, and burdens on issuers, suppliers, and ultimately, investors, and thereby undermine the Commission’s core goals,” Nasdaq’s letter reads.

The financial services provider argued that the SEC’s goal of enhancing climate-related disclosures “could be better accomplished through a comply-or-explain framework for all issuers.”

Nasdaq’s concerns were echoed by more than 70 members of U.S. Congress in a Wednesday letter to the SEC, which called on the regulator to “rescind the proposed rules immediately.”

Members of Congress argued that the purpose of the SEC is to maintain fair, orderly, and efficient markets, whereas its proposed climate disclosure policy seeks to “dictate.”

“Congress did not establish the SEC to set climate policy nor to be the final arbiter of businesses’ strategies to combat climate change, which is what these rules will do,” the letter reads. “The SEC should focus on its core mission-protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation rather than a far-left social agenda.”

A June 10 comment letter from 32 members of the U.S. Senate similarly expressed “serious concerns” regarding the impact of the proposed policy on the agricultural industry and urged the SEC to rescind the rule.

“The proposed rule’s Scope 3 greenhouse gas emissions reporting requirement would place a major reporting burden on the many agricultural producers that provide raw products to the value-chain,” Senate members said. “This proposed rule moves well beyond the SEC’s traditional regulatory authority by mandating climate change reporting requirements that will not only regulate publicly traded companies but will impact every company in the value chain.”

The SEC extended the open comment period for the proposed rule last month, SEC Chair Gary Gensler acknowledging the “diverse” perspectives on the policy shared by companies, investors, and stakeholders.