Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 August 2006 and unaudited

DATA AND PERFORMANCE


Data                          Pricing & Performance
                                                  IEM    MSCI  Impax
                                                  Net   World   ET50
Share Price                                      Asset
(pence)                 103.6                    Value
Warrants (pence)         35.5
Total Fund Size     GBP 130.6        Diluted NAV  99.3   n/a    n/a
(m)                                      (pence)
Market              GBP 135.6   Premium/discount  +4.3
Capitalisation                               (%)
(m)
Management fee            1.0      Undiluted NAV  99.8
(%)                                      (pence)
Established       22 February        Performance
                         2002
Fund structure     Investment        1 month (%)  +1.0   +0.5   +3.1
                        Trust
Number of stocks           75       3 Months (%)  -7.1   +1.1   -4.8
held
Exchange               London         1 year (%) +10.4   +7.5   +9.6
Currency                  GBP         3 year (%) +53.8  +24.8  +38.8
ISIN Number      GB0031232498   Year to date (%)  +7.8   -2.5   +6.3
Sedol                 3123249
Reuters RIC Code        IEM.L NB1 Performance data is for undiluted
                              NAV.
                              NB2 To comply with guidelines issued by
Bloomberg Code         IEM LN the AITC, portfolio valuation moved to
                              bid from mid price with effect from 31
                              December 2005.


TOP TEN HOLDINGS


            Company Holding %                   Description   Country
          Itron Inc       3.0   Meters & utilities software        US
     Chloride Group       2.7                   UPS systems        UK
           LKQ Corp       2.5          Automotive recycling        US
                                   High efficiency electric
       Regal Beloit       2.5                        motors        US
Vestas Wind Systems       2.5                          Wind   Denmark
      RPS Group Plc       2.4      Environmental consulting        UK
Energy Developments       2.3     Landfill gas developments Australia
          Esco Tech       2.3           Filtration & meters        US
     Grupo Auxiliar
        Metalurgico       2.3                          Wind     Spain
     Canadian Hydro
         Developers       2.3          Renewable energy IPP    Canada

              Total      24.8


PORTFOLIO ANALYSIS*


Geographical          Company Size
North America     44% >£500m         44%
Europe            49% £100-500m      39%
Rest of the World 7%  <£100m         17%

Sectoral              Profitability
Energy            40% Profitable     89%
Water             29% Pre-Profitable 11%
Waste             31%
* of funds invested as of 31 August 2006








MANAGER'S COMMENTARY (August 2006)


The Company NAV  was up 1.0%  over the month  compared with the  MSCI
World, which rose  by 0.5%, and  the Impax ET50,  which increased  by
3.1% over the same period.   In the broader markets, IT Hardware  and
insurance were the  best performing sectors,  with steel and  natural
resource stocks underperforming.

During the month,  the state and  territory governments of  Australia
unveiled proposals for a national greenhouse gas trading scheme in an
effort to redress the lack of  leadership on climate change shown  by
the federal  government.    The scheme  would  apply  to  electricity
generators with a capacity greater  than 30MW, and would cover  about
100 generators  that jointly  account for  35% of  Australia's  total
greenhouse gas emissions.   This echoes moves  in the United  States,
where Governor  Schwarzenegger announced  plans to  cut  California's
greenhouse  gas  emissions   by  25%   by  2020,   and  where   seven
north-eastern  states  have  agreed  on  a  Regional  Greenhouse  Gas
Initiative.  In the water sector, Spain announced the construction of
three further desalination projects, as water reservoir capacity fell
below 40% and  the same point  in 2005, the  worst year for  rainfall
since records began 147  years ago.  The  plants will cost over  ¤722
million and  make use  of  membranes for  reverse-osmosis  treatment,
which is now  the industry standard.   Spain is  the largest user  of
desalination technology  outside the  Middle East,  producing  enough
water for about  8 million people.   In waste  sector, China's  State
Environmental Protection Administration issued a policy to  encourage
"polluter responsibility" for electronic waste.  Under the new rules,
manufacturers will be  encouraged to recycle  and extend the  working
life of components, and to replace any toxins.

Stocks that contributed to the  increase in the company's NAV  during
August included Itron (meters & software, US), which increased by 20%
after the US Federal Energy  Regulatory Commission released a  report
that was highly favourable to  the deployment of demand response  and
advanced metering technologies.   Energy  Developments (landfill  gas
development, Australia, +19%) and Abengoa (bioethanol and  recycling,
Spain, +13%)  both  rose on  the  back of  strong  results.   On  the
downside Fuel system Solutions, formerly  Impco (clean engine tier  1
supplier, US), declined by 32% following company restructuring.

During the  month we  bought into  Itron and  Energy Developments  on
price weakness and exited Headwaters (recycling & clean coal, US).


Latest information available at: www.impax.co.uk/asset/iemdown.htm

20 September 2006

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