Does environmental spending matter for firm value? Source-verified evidence from Indonesia’s listed palm oil companies

Indonesian listed palm oil companies report environmental spending on waste management, rehabilitation, emissions control, renewable energy, and biodiversity, but reporting labels and measurement boundaries vary across firms. This study examines whether source-verified annual environmental expenditure is positively associated with firm value. The sample is an unbalanced panel of 40 firm-year observations from 11 companies during 2020–2024. The expenditure measure includes identifiable annual monetary environmental spending and excludes inseparable social-responsibility totals, general operating costs, and cumulative project-investment stocks. Approximate Tobin’s Q is the primary outcome, with price-to-book value, lagged expenditure, firm-and-year fixed effects, source-value sensitivities, and a limited 2025 extension used for robustness checks. Inference combines HC1 standard errors, small-cluster adjustment, and an exact wild-cluster bootstrap. The baseline coefficient is negative and insignificant (β = −0.102; HC1 p = 0.878; cluster p = 0.924; wild-bootstrap p = 0.905), while robustness specifications likewise show no significant positive association. Environmental expenditure was therefore not positively and significantly associated with firm value in the sampled firms and period. The study contributes a source-audited monetary measure distinct from broad ESG ratings.