Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 May 2007 and unaudited.

DATA AND PERFORMANCE


Data                          Pricing & Performance
                                                    IEM  MSCI  Impax
                                                    Net  World  ET50
Share price                                        Asset
(pence)                 131.3                      Value
Warrants (pence)         46.0
Total fund size     GBP 278.2  Diluted NAV (pence) 125.3  n/a   n/a
(m)
Market              GBP 285.3 Premium/discount (%) +4.7
capitalisation
(m)
Management fee            1.0        Undiluted NAV 128.0
(%)                                        (pence)
Established       22 February         Performance*
                         2002
Fund structure     Investment          1 month (%) +4.5  +3.6   +6.5
                        Trust
Number of stocks           81         3 months (%) +10.6 +7.5  +20.5
held
Exchange               London           1 year (%) +19.1 +15.7 +34.3
Currency                  GBP          3 years (%) +93.6 +43.7 +101.8
ISIN number      GB0031232498          5 years (%) +37.3 +23.6 +33.0
Sedol                 3123249         Since launch +30.3 +23.5 +33.4
                                  (22/02/2002) (%)
Reuters RIC code        IEM.L
                              * Performance data is for undiluted
Bloomberg code         IEM LN NAV.


TOP TEN HOLDINGS


Company        Holding %   Description                    Country
Itron                2.6   Meters & software              US
LKQ Corp             2.4   Automotive recycling           US
                           High efficiency electric
Regal Beloit         2.4   motors                         US
Tomra                2.2   Reverse vending machines       Norway
Vestas Wind
Systems              2.1   Wind                           Denmark
Chloride Group       2.0   UPS systems                    UK
Ormat                2.0   Geothermal                     Israel / US
Stantec              2.0   Environmental consulting       Canada
Mueller Water        2.0   Water treatment                US
Mayr Melnhof
Karton               2.0   Recycled packaging             Austria

Total               21.7


PORTFOLIO ANALYSIS*


Geographical          Company Size
North America     42% >£1bn          25%
Europe            50% £100-1bn       65%
Rest of the World 10% <£100m         10%

Sectoral              Profitability
Energy            42% Profitable     92%
Water             26% Pre-Profitable 8%
Waste             32%
* of funds invested as of 31 May 2007













MANAGER'S COMMENTARY (May 2007)


The Company NAV was up 4.5% over the month compared with the MSCI
World, which rose by 3.6%, and the Impax ET50, which increased by
6.5% over the same period.  In the broader markets, Energy Equipment
& Services and Materials were the best performing sectors, with
Consumer Staples and Healthcare underperforming.

During the month President Bush unveiled a U-turn towards climate
change, calling on the world's leading economies to join the US in
agreeing a long-term global goal for reducing greenhouse gases by the
end of 2008.  Bush's proposals included boosting investment in
research and development for energy-efficient technologies, but again
rejected firm caps on carbon dioxide emissions.  However, global
leaders and commentators, including UN climate change chief Yvo de
Boer, were optimistic that this could be the start of a policy
shift.  Earlier in the month, President Bush signed an Executive
Order directing the U.S. Environmental Protection Agency, and the
Departments of Transportation, Energy, and Agriculture to develop
regulations limiting greenhouse gas emissions from motor vehicles.
As a starting point, measures will be taken from the "20-in-10 plan"
announced in the State of the Union address, which aims to cut
America's gasoline usage by 20 percent over the next 10 years.

In the water sector, the US Senate passed the Water Resources
Development Act, a $13.9 billion bill to be implemented by the Army
Corps of Engineers, which contains provisions to repair and maintain
existing infrastructure, while authorising projects that address
environmental infrastructure, including municipal water and
wastewater.  In the meantime the Water Quality Financing Act of 2007,
which was passed by the House of Representatives in March, awaits a
sponsor from Senate.  The bill will provide $14 billion through 2011
for the State Revolving Loan Fund, focused on waste water projects.
If successful both bills are positive news for water technology and
equipment suppliers.

In the waste sector, UK Environment Secretary David Miliband unveiled
a controversial strategy, in which councils would be able to
introduce charges for non-recycled household rubbish, in order to
reduce the amount of waste sent to landfill.  The UK currently lags
the rest of Europe in recycling, where the EU Landfill Directive
requires a 25% reduction on 1995 levels by 2010, and a 65% cut by
2020.  Measures from the UK Energy White Paper will also provide
"banded" support for biomass, to allow more waste-to-energy
technologies to qualify for Renewable Obligation Certificates (ROCS),
which will favour alternative solutions to landfill such as advanced
gasification technologies and mechanical biological treatment.

Stocks that contributed to the increase in the Company's NAV during
May included Tanfield (electric vehicles and powered access, UK),
which climbed 26% following key contract wins during April, Nibe
(ground source heating, Sweden) and Kurita (water treatment, Japan),
which gained 15% each on strong market outlook and strength in Asia
respectively.  On the downside Energy Developments (landfill gas
development, Australia) retreated 11% on project delays and cost
overruns.


Latest information available at:


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

27 June 2007

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