Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 December 2007 (unless otherwise stated) and
unaudited.

DATA AND PERFORMANCE


Data                          Pricing & Performance
                                                   IEM   MSCI  Impax
                                                   Net   World  ET50
Share price                                       Asset
(pence)                 128.9                     Value
Warrants (pence)         45.0
Total fund size     GBP 381.7 Diluted NAV (pence) 127.8   n/a   n/a
(m)
Market              GBP 388.2    Premium/discount -0.8%
capitalisation                                (%)
(m)
Management fee            1.0       Undiluted NAV 129.9
(%)                                       (pence)
Established       22 February        Performance*
                         2002
Fund structure     Investment         1 month (%)  +4.9  +1.9   +8.8
                        Trust
Number of stocks           91        3 months (%)  +3.5  -0.5  +18.4
held
Exchange               London          1 year (%) +16.3  +5.3  +68.4
Currency                  GBP         3 years (%) +69.6  +31.0 +146.7
ISIN number      GB0031232498         5 years (%) +139.1 +62.2 +206.3
Sedol                 3123249        Since launch +32.4  +20.6 +78.0
                                 (22/02/2002) (%)
Reuters RIC code        IEM.L
                              * Performance data is for undiluted
Bloomberg code         IEM LN NAV.


TOP TEN HOLDINGS


Company             Holding %   Description               Country
Itron                     2.7   Meters & software         US
Ormat                     2.5   Geothermal                Israel / US
                                High efficiency electric
Regal Beloit              2.4   motors                    US
Gamesa                    2.3   Wind                      Spain
Vestas Wind Systems       2.2   Wind                      Denmark
Mayr Melnhof Karton       2.0   Recycled packaging        Austria
Pall Corp                 1.9   Filtration                US
Clean Harbors             1.9   Hazardous waste           US
                                Waste disposal &
Lassila & Tikanoja        1.9   recycling                 Finland
Tomra                     1.9   Reverse vending machines  Norway

Total                    21.8


PORTFOLIO ANALYSIS*


+------------------------------------------------+
| Geographical            | Company Size         |
|-------------------------+----------------------|
| North America     | 46% | >£1bn          | 39% |
|-------------------+-----+----------------+-----|
| Europe            | 46% | £100-1bn       | 49% |
|-------------------+-----+----------------+-----|
| Rest of the World | 8%  | <£100m         | 12% |
|-------------------------+----------------+-----|
|                         |                |     |
|-------------------------+----------------------|
| Sectoral                | Profitability        |
|-------------------------+----------------------|
| Energy            | 43% | Profitable     | 94% |
|-------------------+-----+----------------+-----|
| Water             | 26% | Pre-Profitable | 6%  |
|-------------------+-----+----------------+-----|
| Waste             | 31% |                |     |
|------------------------------------------------|
| * of funds invested as of 2 January 2008       |
+------------------------------------------------+













MANAGER'S COMMENTARY (December 2007)


+-------------------------------------------------------------------+
| December was a volatile month in equity markets as investors      |
| weighed the impact of slowing global growth and credit market     |
| issues against the likelihood of further interest rate cuts.      |
| Against this background, the Company NAV was up 4.9% over the     |
| month compared with the MSCI World Index, which gained 1.9%, and  |
| the Impax ET50 which rose 8.8% over the same period.              |
|                                                                   |
| During the month the UN climate conference in Bali produced a     |
| two-year 'roadmap' for negotiation to reduce greenhouse gas       |
| emissions post-2012 (though no binding target), as well as new    |
| climate change adaptation funds, anti-forestation mechanisms and  |
| technology transfers. This outcome was widely seen as a small     |
| step forward for a global agreement, with the US finally at the   |
| table.                                                            |
|                                                                   |
| In alternative energy and energy efficiency, President Bush       |
| signed into law a landmark energy bill that will increase US      |
| vehicle fuel efficiency, boost ethanol use and phase out the      |
| incandescent light bulb. The bill was the focus of intense        |
| speculation prior to enactment and disappointed the renewables    |
| lobby by failing to extend tax credits for wind and solar, and    |
| dropping a federal renewable portfolio standard. The industry     |
| must now wait to see if tax credits will be extended beyond 2008, |
| though market confidence is high and we expect developments in    |
| Q1.                                                               |
|                                                                   |
| In water treatment and pollution control, the European Union      |
| approved two laws governing air quality and marine protection:    |
| The Marine Directive will require member states to take measures  |
| to ensure the "good environmental status" of EU seas from 2020;   |
| and the Air Quality Directive will establish the first ever       |
| binding EU limits on ambient levels of ultra-fine particles from  |
| 2015, including new controls on heavy vehicle emissions.          |
|                                                                   |
| In waste technologies and resource management, electronic waste   |
| continued to climb up the US political agenda with Wisconsin the  |
| latest state to propose a manufacturer funded recycling           |
| programme, along similar lines to the EU WEEE directive.          |
|                                                                   |
| Stocks that contributed to the increase in the Company NAV        |
| included Itron, up 24% on news of new contracts, Vestas, up 14%   |
| on strong Q3 margins and positive outlook, and Stantec, which     |
| rose 15% following news of acquisition activity. Disappointing    |
| performances came from Kingspan as growth expectations were       |
| downgraded for 2008, related to exposure to construction markets. |
+-------------------------------------------------------------------+


Latest information available at:


http://www.impax.co.uk/impax/funds/listed_funds/environmental_plc/

25 January 2008

---END OF MESSAGE---