Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 May 2009 (unless otherwise stated) and
unaudited.

DATA AND PERFORMANCE


  Data                                 Pricing and Performance
                                                          IEM   MSCI
                                                          Net   World
                                                         Asset  Small
  Share price (pence)             99.9                   Value  Cap*
  Warrants (pence)              GBP 14
  Total fund size (m)        GBP 313.6       Diluted NAV 102.5   n/a
                                                 (pence)
  Market capitalisation      GBP 304.3  Premium/discount  -2.9
(m)                                                  (%)
  Management fee (%)               1.0     Undiluted NAV 102.9
                                                 (pence)
  Established              22 February     Performance**
                                  2002
  Fund structure            Investment       1 month (%)  +2.8  -0.5
                                 Trust
  Number of holdings                91      3 months (%) +21.6  +22.0
  (including unlisted)
  Exchange                      London        1 year (%) -22.6  -18.1
  Currency                         GBP       3 years (%)  -4.2  -15.5
  ISIN number             GB0031232498       5 years (%) +55.6  +23.4
  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
Ormat                2.6   Geothermal                      Israel/US
Clean Harbors        2.4   Hazardous waste                 US
Regal Beloit         2.3   High efficiency electric motors US
Gamesa               2.3   Wind turbine manufacturer       Spain
EDP Renovaveis       2.2   Renewable energy utility        Portugal
Itron                2.2   Metering & utilities            US
Pall Corp            2.1   Filtration                      US
Chloride Group       2.1   UPS systems                     UK
Nibe                 2.1   Heat pumps                      Sweden
Abengoa              2.0   Bioethanol & recycling          Spain

TOTAL               22.3



PORTFOLIO ANALYSIS*



  Geographical          Company Size
  US and Canada     38% >$2bn        27%
  EU and EFTA       45% $200-2bn     55%
  Rest of the World 14% <$200m       15%
  Cash              3%  Cash         3%

  Sectoral              PE ratios
  Energy            44% PER >20x     29%
  Water             23% PER  15-20x  31%
  Waste             30% PER <15x     34%
Cash                3%  Unprofitable 3%
                        Cash         3%
* of funds invested as of 31 May 2009

IMPAX ENVIRONMENTAL MARKETS plc

MANAGER'S COMMENTARY (May 2009)


During May the Company NAV increased by 2.8% compared to the MSCI
World Small Cap which decreased by 0.5%.

In energy news, the latest International Energy Outlook predicts that
global energy demand will rise 44% over the next 20 years, with CO2
emissions increasing 39% unless new policies are established to curb
growth. In the US, the House of Representatives passed its version of
cap-and-trade legislation with a bill that will initially allocate up
to 85% of emissions allowances free to a number of industries,
representing a major watering down of Obama's initial proposal of
100% auctioning. The legislation also included a 20% Combined
Efficiency and Renewable Electricity Standard that requires states to
increase use of renewable electricity and efficiency by 2020. This is
also a reduction from the original plan to source 25% of electricity
from renewables by 2025. The Senate is working on carbon and energy
legislation of its own, and the two chambers must both pass the same
bill for it to become law. In the UK, the government provided details
of its plans to install smart electricity and gas meters in every
home in the UK by 2020. Press reports from China suggest that new
renewable energy plans currently being drafted may allocate $659bn to
renewable energy projects over 10yrs, 50% more than previously
planned. In pollution control, Obama proposed an aggressive increase
in US automotive fuel efficiency and emissions standards. Average
fuel standards for all new passenger vehicles are set to rise by
10mpg to 35.5mpg between 2012 and 2016, accelerating an existing plan
to achieve an average of 35mpg by 2020. In waste news an
international treaty for the recycling of ships is set to be adopted
by the International Maritime Organisation. Japan, China, India and
the EU are expected to ratify the treaty which will take effect in
2012.

In the Alternative Energy & Energy Efficiency sector, positive news
flow on LEDs, including acceleration of new markets (for LCD TV
backlighting) and stimulus package exposure drove strong performance
of Epistar (Taiwan), up 48% and Zumtobel (Austria), up 28%. Itron
(automated meter reading) raised fresh equity with a rights issue to
strengthen its balance sheet which, together with US stimulus package
exposure for smart grid, led to strong performance, up 27%. In the
Water & Pollution Control, China Everbright (water and waste to
energy projects, Hong Kong) outperformed due to strong momentum and
government backing for the environmental sector in China, rising 37%.
In Waste Technologies & Resource Management, increased investor
interest in more highly geared companies and also stabilisation and
anticipated recovery in commodity prices benefited the sector, in
particular Abengoa (Bioethanol & recycling, Spain) up 33% after good
results, Lee & Man (recycled carton board, Hong Kong) and Sims Group
(metals recycling, Australia), up 44% and 15% respectively. LKQ
(recycled car parts, US) underperformed on profit taking, as did
Energy Developments (renewable IPP, Australia) reflecting ongoing
regulatory uncertainty in its Australian business. PV Crystalox
(solar, UK) was weak following project deferrals and increasing price
pressure in their wafer business.



Latest information available at:


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

16 June 2009

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