Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 May 2008 (unless otherwise stated) and
unaudited.

DATA AND PERFORMANCE


Data                         Pricing & Performance
                                                   IEM   MSCI   FTSE
                                                   Net   World  ET50
Share price                                       Asset
(pence)                130.8                      Value
Warrants                43.0
(pence)
Total fund size    GBP 403.3  Diluted NAV (pence) 130.7   n/a   n/a
(m)
Market             GBP 396.5 Premium/discount (%)  0.0
capitalisation
(m)
Management fee           1.0        Undiluted NAV 133.0
(%)                                       (pence)
Established      22 February         Performance*
                        2002
Fund structure    Investment          1 month (%)  +6.0  +1.3   +4.7
                       Trust
Number of                 94         3 months (%) +10.1  +5.5  +15.6
stocks held
Exchange              London           1 year (%)  +3.9  -5.5  +24.9
Currency                 GBP          3 years (%) +74.3  +23.4 +123.0
ISIN number     GB0031232498          5 years (%) +142.2 +47.5 +175.3
Sedol                3123249         Since launch +35.3  +16.7 +66.6
                                 (22/02/2002) (%)
Reuters RIC            IEM.L
code                         * Performance data is for undiluted NAV.
Bloomberg code        IEM LN


TOP TEN HOLDINGS


Company        Holding %   Description                    Country
Chloride Group       2.7   UPS systems                    UK
Vestas Wind
Systems              2.4   Wind                           Denmark
Ormat                2.4   Geothermal                     Finland
Clean Harbors        2.3   Hazardous waste                US
Itron                2.3   Meters & software              US
                           High efficiency electric
Regal Beloit         2.3   motors                         US
Gamesa               2.2   Wind                           Spain
Pall Corp            2.1   Filtration                     US
Abengoa              2.0   Bioethanol & recycling         Spain
Grontmij             2.0   Environmental consulting       Netherlands
TOTAL               22.6


PORTFOLIO ANALYSIS*


Geographical          Company Size
North America     42% >$2bn        36%
Europe            45% $200-2bn     59%
Rest of the World 13% <$200m       5%

Sectoral              PE ratios
Energy            43% PER >20x     45%
Water             25% PER  15-20x  26%
Waste             32% PER <15x     26%
                      Unprofitable 3%
* of funds invested as of 31 May 2008


MANAGER'S COMMENTARY (May 2008)


During May the oil price rose to yet another record, above $135 a
barrel, after US stockpiles unexpectedly dropped amid rumours that
the International Energy Agency may lower supply forecasts. The
Company NAV increased by 6.0% over the month compared with the MSCI
World, which rose by 1.3%, and the FTSE ET50 which gained 4.7% over
the same period.

In Alternative Energy & Energy Efficiency, Ohio became the 26th US
state to enact a renewable energy portfolio standard (RPS) requiring
utilities to obtain 25% of retail sales from 'advanced' energy
sources by 2025. At the Federal level, the House of Representatives
voted to extend the solar tax credit by six years and the wind tax
credit by one year. Despite this apparent progress, the legislation
in this form is unlikely to pass both houses and avoid presidential
veto due to the controversial issue of how to pay for the credits. We
remain optimistic that both tax credits will be renewed for at least
one year before they expire, although this may not happen until after
the summer recess.

In Water Treatment & Pollution Control, the UK water regulator Ofwat
issued a report calling for liberalisation of the water industry with
businesses able to choose supplier, and competition eventually
spreading to households. The regulator argues that breaking up the
existing regional monopolies would encourage innovation and solutions
to the challenges of climate change and growing populations.
Elsewhere, EU member states' representatives agreed upon a draft
directive establishing environmental protection measures through
criminal law. If adopted, the directive will establish a set of
conducts that will be considered criminal offences throughout the EU.

In Waste Technologies & Resource Management, New York City Council
adopted an electrical waste recycling standards bill requiring
manufacturers to collect 25% by 2012, rising to 65% by 2018, or face
financial penalties.

Stocks that contributed to performance during the month included
natural gas engine companies Westport (Canada) and Fuel System
Solutions (US), which advanced 48% and 49% respectively, following
increasing interest in natural gas as a transport fuel rather than
politically sensitive biofuels. Chloride rose 32% after a bid
approach by Emerson Electric, and Pall Corp gained 17% on strong
results and expansion announcements. On the downside, Tanfield
(electric vehicles, UK) suffered from a loss of confidence in the
company's ability to meet guidance, and Kingspan (insulation
materials, Ireland) continued to disappoint due to exposure to the
weakening domestic construction market.


Latest information available at:


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

31 May 2008

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