Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 October 2006, unaudited, and includes the
Impax Environmental Markets
C Share which converted on 6 October 2006.

DATA AND PERFORMANCE


Data                              Pricing & Performance
                                                     IEM  MSCI  Impax
                                                     Net  World ET50
                                                    Asset
Share Price (pence)         109.1                   Value
Warrants (pence)               37
Total Fund Size (m)       GBP 209       Diluted NAV 103.6  n/a   n/a
                                            (pence)
Market                  GBP 218.5  Premium/discount +5.3
Capitalisation (m)                              (%)
Management fee (%)            1.0     Undiluted NAV 104.3
                                            (pence)
Established           22 February      Performance*
                             2002
Fund structure         Investment       1 month (%) +3.3  +1.5  +2.8
                            Trust
Number of stocks               76      3 Months (%) +5.6  +5.0  +7.5
held
Exchange                   London        1 year (%) +19.6 +10.6 +17.8
Currency                      GBP        3 year (%) +54.9 +31.5 +43.0
ISIN Number          GB0031232498  Year to date (%) +12.7 +1.8  +10.8
Sedol                     3123249
Reuters RIC Code            IEM.L
                                  * Performance data is for undiluted
Bloomberg Code             IEM LN NAV.


TOP TEN HOLDINGS


Company        Holding %   Description                     Country
Regal Beloit         2.9   High efficiency electric motors US
Chloride Group       2.8   UPS systems                     UK
LKQ                  2.6   Automotive recycling            US
Itron Inc            2.5   Meters & software               US
Tomra                2.4   Reverse vending machines        Norway
Gamesa               2.2   Wind                            Spain
Abengoa              2.1   Bioethanol & recycling          Spain
Dionex               2.1   Testing & monitoring            US
Ormat                2.0   Geothermal                      Israel/US
Canadian Hydro       2.0   Renewable energy IPP            Canada

Total               23.6


PORTFOLIO ANALYSIS*


+------------------------------------------------+
| Geographical            | Company Size         |
|-------------------------+----------------------|
| North America     | 44% | >£500m         | 47% |
|-------------------+-----+----------------+-----|
| Europe            | 48% | £100-500m      | 40% |
|-------------------+-----+----------------+-----|
| Rest of the World | 8%  | <£100m         | 13% |
|-------------------------+----------------+-----|
|                         |                |     |
|-------------------------+----------------------|
| Sectoral                | Profitability        |
|-------------------------+----------------------|
| Energy            | 42% | Profitable     | 91% |
|-------------------+-----+----------------+-----|
| Water             | 29% | Pre-Profitable | 9%  |
|-------------------+-----+----------------+-----|
| Waste             | 29% |                |     |
|------------------------------------------------|
| * of funds invested as of 31 October 2006      |
+------------------------------------------------+













MANAGER'S COMMENTARY (October 2006)


+-------------------------------------------------------------------+
| The Company NAV was up 3.3% over the month compared with the MSCI |
| World, which rose by 1.5%, and the Impax ET50, which increased by |
| 2.8% over the same period.  In the broader markets, telecom and   |
| natural resources stocks were the best performers, with consumer  |
| staples and healthcare stocks underperforming.                    |
|                                                                   |
| During the month, the former Chief Economist to the World Bank,   |
| Sir Nicholas Stern, published a ground-breaking report on climate |
| change for the UK Government.  The Stern Report suggests that the |
| cost of mitigating climate change could be as low as 1% of global |
| GDP, versus a cost of 5-20% if action is delayed, and recommends  |
| a doubling of worldwide public spending on research and           |
| development into low-carbon technologies and a sharp increase in  |
| incentives to encourage people to use them.  This coincided with  |
| an announcement by EU energy commissioner, Andris Piebalg, of     |
| plans to cut the EU's energy consumption by 20 percent by 2020.   |
| The plan, which will be implemented over the next six years,      |
| proposes stringent new energy efficiency standards and financing  |
| mechanisms to support more energy efficient products.  Outside    |
| the EU, the Norwegian government announced the formation of a     |
| US$3.2 billion fund to provide subsidies for renewable energy and |
| power savings projects, in order to meet a looming electricity    |
| shortage.  In the US, the Texas Governor, Rick Perry, unveiled a  |
| partnership with the private sector that will invest more         |
| than US$10 billion in new wind power, consolidating its position  |
| as the top wind-power producing state.                            |
|                                                                   |
| In the water sector, the Spanish government published details of  |
| 2,100 wastewater disposal and treatment projects over the next    |
| ten years at a cost of ¤20 billion, which are designed to achieve |
| compliance with the Urban Waste Water and Water Framework         |
| Directives.  In the waste sector, a leaked letter from the UK     |
| environment minister to Chancellor Gordon Brown suggested that    |
| the annual increase to landfill tax of £3 per tonne should be     |
| increased, and that the ceiling of £35 should be doubled to £70.  |
| If implemented, this will significantly accelerate the transition |
| to high tech non-landfill waste solutions.                        |
|                                                                   |
| Stocks that contributed to the increase in the company's NAV      |
| during October included Carmanah (solar-LED lighting, Canada),    |
| which rose 31% following approval of its roadside beacons by the  |
| Florida Department of Transportation, and Pentair (water          |
| treatment, US), which rose 26% after strong Q3 results.  Ballard  |
| (fuel cells, Canada) and CDS (storm water & waste water           |
| management, Australia) gained 23% on involvement in a US Federal  |
| fuel cell bus R&D programme and the sale of Copa UK to GL&V       |
| respectively.  On the downside, Esco (filtration & meters, US)    |
| retreated 6% on the back of project delays.                       |
+-------------------------------------------------------------------+


Latest information available at: www.impax.co.uk/asset/iemdown.htm

21 November 2006

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