Another thing to consider when comparing ESG ratings is materiality. "Material ESG issues are the ones which will cause a company a financial penalty if not handled correctly," said Jon Hale, head of sustainability research for the Americas at Morningstar. "A typical sustainable fund may avoid investing in companies that don't rate highly on their handling of ESG issues, but the focus is on which issues are material to a particular company." For example, he said, material issues for Exxon include green house gas emissions (environmental), community impact (social), and political lobbying and spending (governance). In the case of Facebook, social material issues have more to do with product and stakeholder impacts, diversity issues and data privacy.