Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 30 September 2009 (unless otherwise stated) and
unaudited.

DATA AND PERFORMANCE


  Data                                 Pricing and Performance
                                                          IEM   MSCI
                                                          Net   World
                                                         Asset  Small
  Share price (pence)           115.85                   Value  Cap*
  Warrants (pence)            GBP 23.8
  Total fund size (m)        GBP 375.5    Diluted NAV    121.58  n/a
                                            (pence)
  Market capitalisation        GBP 353  Premium/discount  -5.9
(m)                                                  (%)
  Management fee (%)               1.0     Undiluted NAV 123.15
                                                 (pence)
  Established              22 February     Performance**
                                  2002
  Fund structure            Investment       1 month (%)  +8.2  +7.7
                                 Trust
  Number of holdings                88      3 months (%) +20.1  +25.7
  (including unlisted)
  Exchange                      London        1 year (%) +10.5  +17.5
  Currency                         GBP       3 years (%) +21.9  +6.7
  ISIN number             GB0031232498       5 years (%) +79.9  +48.4
  Sedol                        3123249
  Reuters RIC code              IMPX.L * Performance data is in Total
                                       Return.
                                       ** Performance data is for
                                       undiluted NAV.
  Bloomberg code                IEM LN























TOP TEN HOLDINGS


Company          Holding %   Description                  Country
Itron                  2.4   Automated meter reading      US
Ormat                  2.3   Geothermal                   Israel/US
China Everbright       2.3   Water infrastructure         Hong Kong
Telvent                2.2   Industrial energy efficiency US
Gamesa                 2.2   Wind turbine manufacturer    Spain
Transpacific           2.2   Waste management & recycling Australia
Chloride Group         2.1   Power network efficiency     UK
Clean Harbors          2.1   Hazardous waste              US
Pentair                2.1   Water treatment              US
Abengoa                2.0   Biofuels                     Spain
TOTAL                 21.9



PORTFOLIO ANALYSIS*


  Geographical            Company Size
  US and Canada      35%  >$2bn         31%
  EU and EFTA        46%  $200-2bn      56%
  Rest of the World  16%  <$200m        10%
  Cash                3%  Cash          3%

  Sectoral                PE ratios
  Energy             46%  PER >20x      42%
  Water              20%  PER  15-20x   30%
  Waste              31%  PER <15x      23%
Cash                  3%  Unprofitable  2%
                          Cash          3%
* of funds invested as of 30 September 2009


IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (September 2009)


During September the Company NAV increased by 8.2% compared to the
MSCI World Small Cap which increased by 7.7%.

In policy news, momentum is building in the run up to the UN climate
change conference in Copenhagen in December. At a high level meeting,
Chinese President Hu Jintao stated that China will cut CO2 emissions
by a 'notable margin' by 2020 compared to 2005 levels, though refused
to commit to a target. On a similar platform, President Obama called
for an end to global fossil fuel subsidies that cost $300bn every
year as a significant step in mitigating climate change. In renewable
energy news, the US Department of Energy and Treasury announced that
an initial $1bn in stimulus grants had been rewarded to renewable
energy project developers, coming earlier than expected. In
California, a law was passed to implement a feed-in-tariff for solar
energy, and the legislature also approved a plan to spend $3.1bn on
energy efficiency programmes for homes and other buildings. In Japan,
the government announced a new national feed-in-tariff for solar that
will take effect from November 2009. Japan also hopes to introduce an
environmental tax as a measure to meet the new government's 25% cut
in greenhouse gas emissions by 2020, although no details have yet
been announced. President Sarkozy announced that France will impose a
carbon tax from 2010, and China hinted that a carbon trading plan may
be included in the next Five Year Plan. In Water Treatment and
Pollution control, the US Environmental Protection Agency announced
its intention to require utilities to do more to remove toxins from
wastewater discharged by coal-fired power plants. Regulations will be
forthcoming. In Asia, a study financed by the Asian Development Bank
found that climate change impacts pose a direct threat to the water
and food security of more than 1.6bn people in South Asia. In waste
news, the UK government announced that householders who waste food
could be fined by their local council in a move to cut down food
going to landfill.

In Alternative Energy & Energy Efficiency, positive policy
developments in the smart grid technology sector lifted the share
prices of Itron (advanced metering, US), up 17% following analyst
upgrades. Returning M&A speculation boosted Chloride (uninterruptible
power supplies, UK), up 21%. In Water Treatment & Pollution Control,
Christ Water (water treatment, Austria) was up 21% following the
announcement of a friendly takeover bid. Mueller Water Products
(infrastructure, US) was up 16% after a successful equity offering to
pay down debt. Polypore (filtration, US) recovered from a period of
underperformance, up 14%. In Waste Technologies & Resource
Management, Transpacific Industries (waste management, Australia)
also benefited from an earlier refinancing, up 22%. Seche
Environnement (waste management, France) rose 18% on analyst
upgrades. Covanta (waste-to-energy, US), gave back previous
outperformance, suffering from continued deterioration in electricity
prices. Clean Harbors (hazardous waste, US) also underperformed on
concerns that waste volumes may not recover in the near-term.



Latest information available at:


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

15 October 2009

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