Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

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

DATA AND PERFORMANCE


Data                                 Pricing & Performance
                                                          IEM   MSCI
                                                          Net   World
                                                         Asset
Share price (pence)            118.1                     Value
Warrants (pence)            GBP 34.0
Total fund size (m)          GBP 371 Diluted NAV (pence) 120.5   n/a
Market capitalisation        GBP 359    Premium/discount  -2.0
(m)                                                  (%)
Management fee (%)               1.0       Undiluted NAV 122.0
                                                 (pence)
Established              22 February        Performance*
                                2002
Fund structure            Investment         1 month (%)  -2.2  -2.1
                               Trust
Number of holdings                92        3 months (%)  -2.7  -9.4
(including unlisted)
Exchange                      London          1 year (%)  -4.1  -10.5
Currency                         GBP         3 years (%) +38.3  +2.2
ISIN number             GB0031232498         5 years (%) +105.1 +24.9
Sedol                        3123249        Since launch +24.2  +4.3
                                        (22/02/2002) (%)
Reuters RIC code               IEM.L
                                     * Performance data is for
Bloomberg code                IEM LN undiluted NAV.


TOP TEN HOLDINGS


Company        Holding %   Description                     Country
Clean Harbors        2.7   Hazardous waste                 US
Chloride Group       2.7   UPS systems                     UK
Ormat                2.4   Geothermal                      Israel/US
Vestas               2.3   Wind                            Denmark
Itron                2.3   Meters & utility software       US
Gamesa               2.3   Wind                            Spain
Pall Corp            2.3   Filtration                      US
Regal Beloit         2.1   High efficiency electric motors US
Polypore             2.1   Filtration & separation         US
Transpacific         2.0   Waste management                Australia
TOTAL               23.2


PORTFOLIO ANALYSIS*



  Geographical          Company Size
  North America     41% >£2bn        18%
  EU & EFTA         43% £200-2bn     63%
  Rest of the World 11% <£200m       14%
  Cash              5%  Cash         5%

  Sectoral              PE ratios
  Energy            39% PER >20x     35%
  Water             24% PER  15-20x  17%
  Waste             32% PER <15x     41%
Cash                5%  Unprofitable 2%
                        Cash         5%
* of funds invested as of 31 June  2008

MANAGER'S COMMENTARY (July 2008)


The Company NAV decreased by 2.2% over the month compared with the
MSCI World which decreased by 2.1%.

In the Alternative Energy & Energy Efficiency sector, developed
nations attending the G8 summit in Japan committed to 'consider and
adopt' a goal of 50% greenhouse gas emissions reduction by 2050. This
commitment was weakened by no baseline date to measure reductions
from, but nevertheless is positive given US support for the
proposal.  In Australia, also previously opposed to emissions
reductions targets, a carbon pollution reduction 'discussion' paper
has been published detailing the proposed carbon trading scheme due
to start in 2010.  Meanwhile, the European Parliament formally
approved an agreement to include aviation in the emissions trading
scheme (ETS) from 2012, capping emissions at 97% of 2004-06 levels.
Within Europe, legislative news uncertainty remained in the Spanish
solar market over the expiration of current law this September. It is
likely that a new cap of 300MW will come into force in 2009, with a
reduction in feed-in tariffs, implying flat turnover for the industry
in Spain in 2009/10. The cap is significantly less than the estimates
for installed additional capacity for 2008, which is around 1,000MW.
We expect more visibility in the coming weeks.

In the Water Treatment & Pollution Control sector, EU institutions
agreed new controls on certain chemical fertilizers, including new
rules designed in part to foil terrorist misuse of ammonium nitrate.
In the USA, the EPA strengthened regulations on 5 common pesticides
and now requires farmers to set up buffer zones around fields treated
with certain chemicals. The EPA also published a draft report linking
climate change to higher levels of smog that could harm human health.

In the Waste Technologies & Resource Management sector, industry
consolidation among the big three US waste management companies
remains unresolved. Following the announcement that Republic Services
agreed to buy Allied Waste Industries, Waste Management made moves to
then acquire Republic. This offer has been rebuffed, however Waste
Management claims its proposed purchase is a better move for company
shareholders and we await a resolution.

In Alternative Energy & Energy Efficiency, Xantrex (power conversion,
Canada) gained 47% after a definitive acquisition announcement by
global energy management company, Schneider Electric, and Epistar
(LEDs, Taiwan) was up 17% on orders placed by China handset vendors
in late July. In Water & Pollution Control, Badger Meter (advanced
metering, US) rose 11% following better than expected Q2 results,
including 20% sales expansion driven by ongoing shipments to the City
of Chicago. In Waste Technologies & Resource Management, Stericycle
(hazardous waste management, US), and LKQ (end of life vehicle
recycling, US) both performed well, up 16% and 13% respectively after
beating consensus and raising guidance. However, metals recyclers
Sims Group and Metalico both declined on sector rotation, after
sustained strong performance.



Latest information available at:


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

14 August 2008

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