Impax Asset Management : Strategic Report – For the year ended 30 September 2020

Strategic Report

For the year ended 30 September 2020

Specialists in the transition to a more sustainable economy

Impax Asset Management Group plc

Impax has pioneered investment in the transition to a more sustainable global economy and today is one of the largest investment managers dedicated to this area.

Contents

OVERVIEW	STRATEGIC REPORT
01	Highlights	04	Chief Executive's Report	40	Our People
02	Why Impax?	10	Q&A with the Chief	50	Building a Common
			Executive		Future
		12	Creating and Promoting	57	Risk Management
			Value for all our		and Control
			Stakeholders	58	Principal Risks and
		18	Key Performance		Uncertainties
			Indicators	61	Auditor's Statement
		20	Financial Review
		61	Memberships
		26	Our Investment Strategies
		62	Alternative Performance
			and Performance		Measures
		35	Beyond Investment
		63	Contact Details
			Returns

Naming of companies in this document

For simplicity we use the following short forms in the place of the legal company entity names in this document and the Governance and Financial Report. Impax Asset Management Group plc is referred to throughout as "Impax" or the "Company".

In January 2018, Pax World Management LLC was acquired by Impax and has been re-named Impax Asset Management LLC. This company is based in Portsmouth, New Hampshire and we refer to it as "Impax NH". Impax NH is the manager of Pax World Funds. Impax "North America" refers to the combined businesses of all our US offices. Impax Asset Management Ltd and Impax Asset Management (AIFM) manage or advise Listed Equity funds and accounts, and the Real Assets division. The majority of this business is based in London so we refer to it as "Impax LN".

1.8p per share interim dividend and proposed final dividend of 6.8p per share

Highlights

Financial Highlights

AUM1

£20.2BN

2019: £15.1bn

Adjusted operating profit2

£23.3M

2019: £18.0m

Profit before tax

£16.7M

2019: £18.9m

Shareholders' equity

£71.5M

2019: £63.2m

Business Highlights

OVERVIEW

Revenue

£87.5M

2019: £73.7m

Adjusted diluted earnings per share2

14.5P

2019: 11.5p

Dividend per share3

8.6P

2019: 5.5p

Cash reserves4

£37.4M

2019: £26.2M

• Business resilience and exceptional growth throughout the global pandemic
• Continuing strong net inflows from existing and new clients around the world
• All major investment strategies continued their five year record of out-performance versus their global comparator indices
• An increase in dividend of 56% in line with new dividend policy

1. Assets under management and advice as at 30 September 2020. Assets under advice c. 2.6% of total AUM
2. Adjusted operating profit and adjusted diluted earnings per share are shown after removing the effects of contingent consideration credits, ongoing amortisation of intangibles acquired and market-to-market effects of National Insurance on equity award schemes. See page 62 for further information and note 4 of the financial statements for a reconciliation to the IFRS reported results

3
4	Represents cash and cash equivalents, plus cash invested in money market funds and deposit accounts, less cash held in research payment
	accounts, see page 62 for further information and note 21 of the financial statements for a reconciliation

01

Why Impax?

We believe

That the world is being profoundly shaped by global sustainability challenges, particularly climate change, increasing pollution, inadequate infrastructure, resource scarcity and rising inequality. These factors are creating commercial opportunities that are driving growth for well positioned companies as well as substantial risks for those unable or unwilling to adapt.

Fundamental analysis which incorporates long-term risks, including environmental, social and governance (ESG) factors is essential to identifying well-positioned companies and enhancing investment returns.

We invest

In companies and assets that are well positioned to benefit from the shift to a more sustainable global economy. We seek higher quality companies with strong business models and governance that demonstrate sound management of risk.

An acknowledged	Partnership with
global leader	our clients

We are one of the largest and longest established investors dedicated to investing in the transition to a more sustainable economy, and we manage assets for some of the world's largest investors.

We are committed to outstanding levels of client service with comprehensive and transparent reporting. We also continue to evolve our thought leadership work, stewardship and engagement and our ground-breaking impact reporting.

57	20+ years
Investment team members1 (UK, US, HK)	of specialist manager experience

1 Includes five members of the Executive Committee

02

OVERVIEW

We offer

A well-rounded suite of investment solutions spanning multiple asset classes aiming to deliver superior risk adjusted returns over the medium to long term.

Award winning

Commitment to our values and our stakeholders

Sustainability is important to us. We ensure our investee companies meet our rigorous ESG requirements and we hold ourselves accountable to the same high standards. We measure our own environmental footprint annually and aspire to run our business in line with best practices of governance, diversity and inclusion.

We value our commitment to our philanthropic partners. Our strong financial results allow us to support these partners both financially and through direct participation.

£20.2bn

AUM

03

Chief Executive's Report

"The COVID-19 pandemic has created a tragedy of exceptional proportions and has significantly impaired the global economy. However, against this backdrop, I am pleased to report that Impax has proved its resilience and has delivered another consecutive year of strong growth."

04

"Despite these difficult times and volatile financial markets, I am pleased to report that Impax has had an outstanding year."

Ian Simm

Chief Executive

REPORT STRATEGIC

I am pleased to report that Impax has had an outstanding year. During the 12 months ending 30 September 2020 (the "Period"), the Company's assets under discretionary and advisory management ("AUM") increased by 34% to £20.2 billion, which included £3.5 billion of net inflows into the funds and accounts that we manage. By

30 November 2020, AUM had reached £23.4 billion.

Impax has remained fully operational since the start of the pandemic. We have focused on protecting the health and safety of our colleagues, while continuing to provide a seamless service to clients and fulfilling obligations to our shareholders and other stakeholders. We have sustained strong investment performance while we have also been able to expand our operations and team in line with the needs of the business.

HIGHLY ATTRACTIVE INVESTMENT OPPORTUNITIES

Government policies around the world continue to support our investment thesis, and this year we have witnessed more debate than ever before on what a sustainable economy will look like.

Impax's investment thesis is based on our belief that companies that are benefiting from the transition to a more sustainable economy should, on average, out-perform their peers in other markets. Over the past 12 months we have seen further evidence supporting this view.

While global health care and related social issues have dominated the policy and media agendas in recent months, the impact of climate change has never been more keenly felt. This year has seen the worst wildfires in US history, and summer in the northern hemisphere has been the hottest since records began, with the coverage of Arctic sea- ice reaching another historical low. The impacts of climate change have been largely in line with scientific models, but the human and social cost appears to be much greater than expected.

Against this backdrop, there are many compelling reasons for optimism, with large flows of private capital into climate- mitigating technologies and business models, shareholder activism against the worst polluters, rapidly rising consumer interest, and ever more robust environmental regulation.

I would like to thank my colleagues for their dedication and resilience during the pandemic, which have allowed us to maintain our high standards.

05

Chief Executive's Report continued

As society responds to the challenges of sustainable development, our investment thesis continues to strengthen.

INVESTMENT PERFORMANCE

The Listed Equity strategies managed by our London-centred team have performed well. The two largest strategies, Water and Leaders, posted increases of 9.6% and 14.8% respectively for the Period, against their global comparator index, the MSCI All Country World ("ACWI") which returned 5.3%. The Specialists strategy, which is the basis for our UK investment trust, Impax Environmental Markets plc, returned 13.9%, and in March, this trust joined the FTSE 250 index.

The Asia-Pacific strategy was the standout performer with returns of 19.3% reflecting the strong recovery in most regional stock markets, while our fastest-growing strategy, Global Opportunities, returned 12.9%, outperforming the ACWI by 7.6%. The Sustainable Food strategy, which has a relatively defensive investment approach, returned 3.3%, 2% below ACWI but outperforming its specialist benchmark by 5.6%.

Performance from the Pax World Funds managed by our US-based team has improved considerably, with more than half of the funds significantly outperforming their benchmarks, and three funds ranked in the top decile of their respective peer groups. This fund range has had positive net inflows of over US$380 million over the Period, with allocations focused on the Pax Global Environmental Markets Fund, Pax Global Women's Leadership Fund and the Pax Large Cap fund.

A more detailed insight into our major investment strategies and their performance over one, three and five years is included on pages 26 to 34.

Real Assets

Our team investing in markets linked to renewable power generation made good progress in investing our third fund, Impax New Energy Investors III ("NEF III"), committing additional capital in Norway, France and Germany and making its first commitments in Spain.

Our AUM growth since inception

£18.0bn					£20.2BN
£20.0bn
£16.0bn
£14.0bn
£12.0bn
£10.0bn
£8.0bn
£6.0bn
£4.0bn
£2.0bn
0
2000	2004	2008	2012	2016	2020

06

In an increasingly competitive marketplace we have a large pipeline of potential investors, particularly for our Listed Equity strategies.

REPORT STRATEGIC

During the Period we received £3.5 billion in net new client money.

Our clients consistently point to our engagement and impact measurement work as important points of differentiation.

We have further strengthened our connections to the environmental science community.

We expect this fund to be fully invested by the end of 2021 and are advancing our plans to raise additional capital in this area.

CLIENT SERVICE AND BUSINESS DEVELOPMENT

Impax experienced another year of strong net inflows from investors around the world.

This year our business development in the UK has been particularly successful. The Global Opportunities mandate that we manage on behalf of St James's Place recorded net inflows of £877 million, while our Irish UCITS fund range received £269 million on a net basis. In Continental Europe total net inflows were £1.1 billion, with contributions from direct sales to institutional investors and from our distribution partners, particularly Formuepleje in Denmark, ASN Bank in the Netherlands, and BNP Paribas Asset Management ("BNPP") across multiple countries in the region.

In November 2020, we announced that BNPP had executed its

plan to reduce its holding in the Company from c.24.5% to c.14.0%, having seen a very positive return on their original investment made in 2007. BNPP remains Impax's largest shareholder and a key distribution partner. The relationship was cemented with a new distribution agreement

on very similar terms to the Memorandum of Understanding covering distribution that has been in place since 2007.

1 Latest available data

Although the pandemic delayed some institutional mandate searches, we expect these to catch up in 2021. Our North American business had another strong year, with positive net inflows of US$778 million. We are seeing

an increasing number of buy recommendations from investment consultants and are continuing to build our relationships with leading asset owners in the US. We also extended our work in Canada,with new sub-advisory mandates for NEI Investments and Desjardins.

BEYOND INVESTMENT RETURNS

In addition to the pursuit of excellent investment returns, we focus on four broader areas. First, our corporate engagement aims to enhance our understanding of investment risk. In 20191

we engaged with over 100 companies, or close to half of all those in which we invest.

Second, as pioneers in the calibration of the positive environmental impact of our investments, we have issued our sixth annual Impact Report which covers listed equities and also describes how we have applied our methodology to the fixed income portfolios that we manage.

Third, we have strengthened our connections to the environmental science community with the aim of augmenting our work on climate risk and, more recently, biodiversity. In October we published a white paper on physical climate risk and have also become a core member

of the Coalition for Climate Resilient Investment and joined efforts to set up a new Task Force on Nature-related Financial Disclosures.

07

Chief Executive's Report continued

This is the seventh consecutive year that Impax has been awarded A+ and A scores across all applicable categories in the UN-backed Principles for Responsible Investment (PRI) assessment report of Environmental, Social and Governance (ESG) integration efforts.

And finally, this year we also have expanded our specialist policy team in order to deepen our policy insights as well

as our contributions to the development of effective future laws and regulations. Over the year, we have joined a number of organisations and initiatives, including the Confederation of British Industry's Energy

• Climate Change Board, the Climate Financial Risk Forum and the Energy Transitions Commission.

DEVELOPING IMPAX'S TALENT

We have continued to recruit through the pandemic, and our team now comprises 175 individuals, an increase in headcount of 12% since the start of the Period.

As our volume of business has grown, we have also taken several important steps to expand and strengthen our HR operations and talent management systems. This has included refreshing

our objectives to ensure that our colleagues can thrive in their current roles and also look forward to attractive career prospects. This year we have focused on developing the leadership skills of our managers, mapping out plans to enhance equality, diversity and inclusion, and, in these challenging times, are devoting particular attention to supporting our colleagues' well-being and mental health.

We have accelerated the integration of our New Hampshire-based team, who joined us in 2018 following the acquisition of Pax World Management LLC. We have now completed the formation of

global teams in several areas, including actively managed listed equities, trading, finance, compliance and HR, and have undertaken additional integration projects in marketing and the definition of a common corporate culture.

For more details, please turn to "Our People" on pages 40 to 49.

AWARDS AND INDUSTRY RECOGNITION

In April Impax was honoured to receive the Queen's Award for Enterprise in the Sustainable Development category for a second time. This represents a significant endorsement of the team's hard work over the past two decades in encouraging companies to improve their sustainability

as well as supporting the growth of pioneering new sustainable businesses.

The Company's expertise has also been acknowledged through numerous prestigious industry awards again this year. These include the Global Investor Investment Excellence awards 2020 (Boutique Manager of the year), FT Pensions Expert PIPA Awards (highly commended in the ESG/SRI Manager of the Year category) and Impax was named one of the Corporate Knights' "Green 50 Top Business Moves for the Planet" list. Furthermore, after Period end we were proud to announce three further award wins: "Ambition Nation Listed 50" award (from Finncap), "Boutique of the Year - Equities" from Financial News, and "European Specialist Investment Firm of the Year" from Funds Europe.

We have accelerated the integration of our New Hampshire-based team.

We have focused on developing the leadership skills of our managers.

The Company's expertise has also been acknowledged through numerous prestigious industry awards again this year.

08

REPORT STRATEGIC

In the United States Pax World Funds was recognised by Bloomberg and the United Nations as one of "50 Climate Leaders" and Ethical Corporation assigned a coveted "Highly Commended" designation to the Pax Ellevate Global Women's Leadership Fund. Joe Keefe, President, was acknowledged as one of the "10 leaders of ESG and Impact Investing" in the US by Investment News and Impax joined the "Best Companies to Work for in New Hampshire" Hall of Fame.

For the seventh consecutive year, Impax has been awarded A+ and A scores across all applicable categories in the UN-backed Principles for Responsible Investment (PRI) assessment report of Environmental, Social and Governance (ESG) integration efforts.

Finally, in November 2020, Morningstar described Impax as a "Leader" for its ESG Commitment, one of only six asset managers globally to be awarded the highest grade.

BREXIT

Given the political uncertainties and the current perceived lack of provision for financial services, we are planning for our Dublin office to be fully operational in December 2020 . We only expect to transfer a small number of clients, representing less than

2% of current AUM. The required associated activities, including some limited recruitment, are advancing in line with our plans.

OUTLOOK

Since the late 1990s Impax has argued that many of those companies that are tackling the environmental problems arising from human activity are set to out-perform their peers in other sectors. More recently, we have extended our analysis and argued that the transition to a more sustainable global economy is accelerating, and that companies whose business models address social issues are providing additional investment opportunities.

We also consider the recent result of the US election to be positive for the markets in which Impax invests. In addition to his commitment to bring the US back into the Paris Climate agreement, President-elect Biden appears determined to address the profound sustainability challenges facing the country, including a climate plan to invest $2 trillion,over four years with targeted zero-emissions power generation by 2035 and a net-zero economy by 2050. Investors are also hopeful that the Democrats will improve ESG integration and disclosure.

This year the effects of COVID-19 have amplified many of the issues associated with investing in the transition to a more sustainable economy, but recent events have also reinforced our investment case. There are strong reasons to believe that governments, investors and consumers are seeking to steer capital towards markets that offer inherent resilience to environmental

and social problems.

Nevertheless, the contours of the post pandemic landscape are not yet clear and the timing of the economic recovery remains uncertain. Corporate balance sheets have been severely impacted, some dividends cancelled or reduced, and we can expect to see many more companies looking to raise capital. Until the roadmap out of the pandemic becomes clearer, we are likely to see considerable volatility across financial markets.

We continue to invest in order to grow the Company and are well positioned for further expansion that should enhance value for all our stakeholders.

Ian Simm

2 December 2020

09

Q&A with the Chief Executive

Ian Simm

Chief Executive

QQQ

Impax has again expanded significantly this year. What steps are the team taking to maintain high standards?

What have been the effects of COVID-19 on the Company?

What steps have you taken to ensure that your workplace is truly diverse and inclusive?

A

In many ways this has been a watershed year. Overall, the Company's performance has exceeded expectations as we've converted rising client demand into net inflows and new mandates. Looking ahead, we are positioning ourselves for continued, sustainable growth by adding to our research resources, extending our distribution and client service capabilities, and further strengthening our support teams, for example in back and middle office. As described elsewhere in this document we've also been investing in the development of our talent and reviewing ways we can cement our strong corporate culture as the team grows.

A

The operational challenges that Impax has faced are negligible compared to the heavy human, social and economic toll that is being wrought worldwide by the pandemic. That said, we have focused closely on our colleagues' well-being as they continue to spend a protracted period working away from the office. I believe that our long- standing, collegial culture has really helped us weather the storm, and I've been really impressed with the way that the team has responded to help deliver exceptional results.

Q

Is the integration of the Pax business complete?

A

This has always been a priority as we build a company that benefits from the best possible decision-making and that can sustain a healthy and productive working culture. This year we have completed Company- wide unconscious bias training and advanced initiatives to strengthen our policies and activity in the areas of gender and ethnic diversity. Recently, we've integrated our oversight of these topics into an Equality, Diversity and Inclusion Group, which includes the appointment of a Non-Executive Director as the Board Sponsor of this work.

Q

Over recent years the Company has broadened and expanded its range of funds. What plans do you have for further expansion and diversification of the business?

A

After nearly three years as a combined firm, I'm very pleased that almost all the major integration projects are complete, and that we've been able to support a business that's doubled in size (relative to the aggregate AUM of the Group when the transaction closed).

A

We continue to expand our range of existing investment strategies where there is a high level of additional capacity. In addition, we are incubating a small number of new strategies, including an Asian strategy based on the investment approach of Global Opportunities, which, if they prove successful, could form the basis of additional offerings to clients in the medium-term.

10

Q	Q
Are investors still as focused on	You have made a new net-zero
environmental strategies and	commitment this year. Why was
climate change as they were	this important?
before the pandemic?

REPORT STRATEGIC

Q

What are your top priorities for the year ahead?

A

Very much so. Many expert commentators believe that this dreadful pandemic will fade into insignificance compared to the long-term threats of climate change and the massive investment this urgently requires. Despite the gloomy prognosis of sustaining "business as usual", the technologies and business processes now exist for society to substantially slow the warming of the planet and achieve "net zero" emissions in due course. In the meantime, there are encouraging signs that investors are rapidly building their awareness of climate risks and are looking to future-proof their investments.

A

We have always been committed to measuring the net carbon impact (which we believe is a much more meaningful metric than carbon footprint) of our private equity funds and our major investment strategies, and we continue to enhance this important work. We also report in detail on our own operational emissions and plans for further reductions. Overall, when we take into account the carbon savings from our direct investments, Impax's emissions arising from operations and investment are in aggregate net carbon positive today. We are committed to the continuous improvement of our practices, measurement and reporting in this area.

A

With the return to normality a long way off, the Executive Committee is committed to helping our colleagues as they work through these difficult circumstances. Our mandate pipeline is strong, and we are concentrating on converting as many

of these opportunities as possible. Furthermore, we expect to add to our headcount in order to extend our investment capabilities, sustain our investment performance and deliver on client expectations.

11

Creating and Promoting Value for all our Stakeholders

Impax is a global investment manager.

We aim to work with all our stakeholders, to make a contribution to the development of a sustainable society and have a positive impact on the environment, particularly by supporting or undertaking relevant research and engaging or collaborating with others.

In addition, we seek to provide a stimulating, collaborative and supportive workplace for our colleagues.

Section 172 of the Companies Act requires the Board to act in the way that they consider would most likely promote the success of the company for the benefit of all stakeholders. In turn the Directors ensure that they, and the management team, have regard, amongst other matters, to:

Stakeholders	Our approach
Clients	We put clients at the heart of our business.
	We are focused on ensuring that we are managing all
	our funds and accounts in line with their investment
	objectives and within a framework that is fully compliant
	with applicable regulations and policies.
	We provide a wide range of investment products and
	solutions, including mutual funds and private assets to
	our clients who are predominantly institutional investors
	and pension funds.
	We seek to deliver consistent outcomes for our clients
	and superior financial returns over the longer term.
	We conduct fundamental analysis which incorporates
	long-term risks, including Environmental, Social &
	Governance (ESG) factors.
	We are committed to measuring and reporting our
	non-financial impacts such as our environmental and
	social impacts.

How we engage

Our client teams build long-term relationships and a deep understanding of our clients' needs and expectations.

Driven by our clients needs we currently offer strategies across five areas: Thematic Equities (Active), Equities (Systematic Beta), Unconstrained Equities, Fixed Income and Real Assets.

Informed by our dialogue with clients we develop new products to provide client solutions and invest our own balance sheet as seed capital.

We report to our clients detail on our engagement and advocacy results and on the environmental impact of our major investment strategies and continue to expand and enhance the content of these documents.

12

REPORT STRATEGIC

• The likely consequences of any decisions in the long term.
• The interests of the Company's staff.
• The need to foster the Company's business relationships with suppliers, customers, distribution partners and others.

• The need to grow the value of the business for our shareholders.
• The impact of the Company's operations on the community and the environment.
• The desirability of the Company maintaining a reputation for high standards of business conduct.

• The need to act fairly as between members of the Company.

2020 highlights	Our plans for the future

Continued strong investment performance with all our major thematic equity strategies outperforming their global comparator indices over one, three and five years.

Net inflows of £3.5 billion, reflecting the continuing rise in investor interest of our strategies, and their strong performance.

Thought leadership highlights included reports on the physical risks of climate change, the financial impact of diversity, and the investor impact of COVID-19.

We remained fully operational throughout COVID-19 restrictions and focused on providing a seamless service to clients.

We will continue to enhance our client service model, tailored to individual needs, and to evolve our reporting capabilities.

We will work with clients to review opportunities to develop new products and investment solutions for our clients and potential clients.

We will target distribution of existing strategies with increased focus on own-brand pooled funds.

We will continue to develop our expertise in fixed income and gender lens investing.

We will grow our headcount and operational resources in order to extend our investment and client servicing capabilities and deliver on client expectations.

13

Creating and Promoting Value for all our Stakeholders continued

The Board sets corporate governance and strategic objectives for the Group and strives for strong governance and stewardship best practice across the business, through the application of a robust corporate governance framework.

Stakeholders Our approach	How we engage

Shareholders The governance and management of the Company is driven by the Board and Executive Committee. We seek

to adhere to high standards of corporate governance and reporting.

As specialists, we are focused on a small number of investment strategies which are highly scalable and enable us to balance tight cost control with the needs of an expanding business. We are investing in robust IT systems, processes and infrastructure, while maintaining a rising operating margin.

Colleagues We seek to be an employer of choice.

We aim to attract and retain talented and committed people, empowering team members to reach their full potential and providing development opportunities and rewarding long-term careers that link to our business needs.

We are committed to Equality, Diversity & Inclusion ("ED&I"). We seek to understand our people and their individual perspectives and to reflect their views. We strive for a diverse staff and an inclusive culture.

We prioritise investment in our staff and aim to empower team members to reach their full potential. We invest significantly in our colleagues' professional and personal development training to ensure we have the skills needed to develop the business.

Investee We are long-term investors and develop strong

companies relationships with many of our holding companies.

We engage with companies to minimise risks, protect shareholder value, promote greater transparency and encourage companies to become more resilient over time.

We are committed to full disclosure and clear communications with institutional and private shareholders and hold meetings throughout the year.

The Chief Executive and Chief Financial Officer present the full and half year results. We encourage shareholders to attend the AGM where the Board and management are available for questions and comment.

We hold regular town halls and team- level meetings, as well as numerous educational and social events.

We learn from, and act on, the regular feedback from our colleagues. This has been particularly important during the pandemic and we have focused on the needs and wellbeing of individuals.

We take a supportive rather than an activist approach, and often work in collaboration with other asset managers or organisations. Our engagement

is focused on: promoting improved practices and transparency on ESG issues; bottom-up company specific monitoring and dialogue; top-down strategic engagement priorities; and proxy voting and corporate governance.

Distribution Over the years we have developed strong relationships

partners with other asset managers who sell our white-label funds through their distribution networks. This enables the Company to sell funds to a much wider network of clients.

Members of our Executive Committee and dedicated client relationship professionals meet our distribution partners regularly and we have strong reporting systems in place.

14

2020 highlights

We outperformed all our KPIs.

Because of COVID-19, it was more difficult to meet in person this year, but we maintained and grew shareholder relationships with virtual meetings and webinars.

We have significantly increased communication with colleagues this year. We have embraced more flexible working practices which will inform our future approach. We have offered additional support around employee wellbeing, including presentations on mental and physical health.

This year Lindsey Brace Martinez assumed the role of Board Sponsor of the Company's ED&I activities.

We increased our investment in leadership training and education for all our people managers to drive a common, consistent standard across our business.

REPORT STRATEGIC

Our plans for the future

Our pipeline of potential new mandates is strong, and we will concentrate on converting as many of these into clients as possible.

In the light of the growing global investor interest in investing more sustainably we will be reviewing the longer-term opportunities for Impax's development.

We continue to build out our global HR capabilities.

We recently announced a key HR initiative to ensure we optimise staff development and wellbeing while simultaneously building our organisation effectively.

We will conduct our detailed biennial staff survey again in 2021.

We remain focused on addressing the gender pay gap, particularly at senior management level.

Our major new Equality, Diversity & Inclusion programme is launching in Q4 2020. We have identified five priorities under Leadership, Talent & Attraction, Data & Benchmarking, Awareness, and Social Impact.

Over the last year we have prioritised four strategic areas of engagement:

Physical climate risk, sustainability and ESG advisory, diversity and pay-equity and corporate governance best practice.

In calendar year 2019 we engaged with 101 companies (approximately half of all our portfolio companies) with 40% positive outcomes.

Net inflows of £2,2721 million by funds distributed by our partners.

In October 2020, we signed a long-term distribution agreement with BNP Paribas Asset Management, cementing our existing agreement.

COVID-19 has brought many sustainability issues into sharper focus, especially the "S", the social aspect of ESG. In the year ahead we will direct additional time and resources to this area, taking a close look at developing methodologies for further integrating and quantifying aspects of human capital in our company analysis, as well as drilling down further into supply chains, in particular what these mean in the knowledge economy.

We seek to build our network of distribution partners in new geographies and markets and deepen existing relationships.

1 Excludes flows from segregated mandates

15

Creating and Promoting Value for all our Stakeholders continued

Stakeholders	Our approach
External	Our third-party suppliers are critical to our business,
service	and therefore we ensure there is an appropriate
providers	oversight framework, which is reviewed periodically.
	The Audit & Risk Committee reviews the Company's
	material outsource providers annually.

Society	Our business is focused on the transition to a more
and the	sustainable global economy. As such, we play a key role
environment	in financing the transition to a low carbon economy,
	protecting the environment, promoting human rights,
	diversity and fair work and pay.
	We are committed to operating to the highest
	standards of corporate responsibility, recognising our
	responsibility to the community in which we operate,
	and to a wider society.

Industry-wide We recognise that working in collaboration with

groups like-minded organisations can be more effective in bringing about changes.

Financial Impax is a global business which has a strong focus

industry on ethical conduct and compliance with applicable

regulators requirements in all jurisdictions where we operate.

How we engage

We expect our suppliers to reflect our values around social inclusion, sustainability, and the environment.

We seek to develop deep relationships and regularly engage with our external suppliers.

We continue to increase our support for a small number of charities which are aligned with our focus on building a more sustainable economy.

We facilitate charitable giving by our colleagues through volunteering and matched financial contributions.

We support a low carbon economy, primarily through our investment decisions, company engagement, our collaboration with clients and stakeholders and policy advocacy.

Vince O'Brien is the Board Sponsor of the Environment Committee.

For a list of memberships see page 61.

We are committed to regulatory reporting and disclosures which benefit market transparency and integrity.

We seek to contribute positively to evolving regulatory standards and actively advocate for sustainable regulatory policies relevant to our activities and clients.

16

REPORT STRATEGIC

2020 highlights	Our plans for the future

We engaged frequently with our suppliers throughout the COVID-19 crisis to ensure that they continued to meet their obligations and had resilient business continuity plans in place.

We have made no material changes to our suppliers.

We continue to strengthen our supplier base and plan to introduce a code of conduct to ensure that our suppliers reflect our values and continue to deliver a high level of service to the Company and our clients.

In the UK 26% of our staff, an increase of 6% for the year, now take part in our matched charitable giving scheme (GAYE). This year we were awarded Platinum Status by GAYE.

In the US, Impax staff volunteered a total of 171 hours with 18 organisations.

Impax's emissions arising from operations and investment are in aggregate net carbon positive today.

In October, we published a white paper on physical climate risk and have also become a core member of the Coalition for Climate Resilient Investment and joined efforts to set up a new Task Force on Nature-related Financial Disclosures.

We have joined a number of organisations and initiatives, including the Confederation of British Industry's Energy

• Climate Change Board, the Climate Financial Risk Forum, and the Energy Transitions Commission.

We have submitted a rulemaking proposal to the SEC requesting corporate disclosure rules so that investors are aware of the physical climate change risks that companies face.

We joined the Bank of England PRA and FCA Climate Financial Risk Forum (CFRF) to share best practice and advance regulators' responses to the financial risks from climate change.

We plan to expand our charitable partner programme to reflect the growth of our business and the breadth of our activities and areas of focus.

We will provide greater support and strategic alignment for our volunteering initiatives around the world.

We are committed to retaining our net carbon positive status across our operations and corporate investments,

We are looking to join and participate in additional organisations where we believe this to be of mutual benefit.

We intend to support a package of reforms under the EU Capital Markets Union project, which includes the Sustainable Finance Disclosure Regulation (SFDR), taxonomy regulation and sustainability amendments to AIFMD, UCITS and MiFID.

17

Key Performance Indicators

We use a number of key performance indicators ("KPIs") to measure our financial performance. This year

we again delivered strong growth for all our KPIs.

AUM

£20.2BN

2020 £20.2bn

2019 £15.1bn

2018 £12.5bn

2017 £7.3bn

2016 £4.5bn

AUM represents our total assets under management and advice. The movement between opening and closing AUM provides an indication of the overall success of the business during the year in terms of both net subscriptions and investment performance. It also provides a good lead indicator of revenue and profitability.

2020: AUM grew by 34% to an Impax record of £20.2 billion.

REVENUE

£87.5M

2020 £87.5m

2019 £73.7m

2018 £65.7m

2017 £32.7m

2016 £21.1m

Revenue represents the fees we have earned for services provided in the year.

2020: Revenue grew by 19% to £87.5m.

ADJUSTED OPERATING PROFIT1

£23.3M

2020 £23.3m

2019 £18.0m

2018 £20.0m

2017 £9.3m

2016 £4.2m

Adjusted operating earnings reflects the performance of our core business. It takes into account our operating efficiency, investments made to grow our business and how we reward and retain our staff.

2020: Adjusted operating profits grew by 29%.

1. This is an Alternative performance measure, see page 62 for definition and calculation
2. Proposed
3. Special dividend

18

ADJUSTED OPERATING MARGIN1

26.6%

2020 26.6%

2019 24.4%

2018 30.4%

2017 28.4%

2016 19.9%

Operating margin is a profitability ratio that shows how much profit we make in relation to our total revenue.

2020: Operating margin grew to 26.6% due to our scalable operating platform.

ADJUSTED DILUTED EARNINGS PER SHARE1

14.5P

2020 14.5p

2019 11.5p

2018 12.4p

2017 5.9p

2016 3.6p

Adjusted diluted earnings per share ("EPS") reflects the overall financial performance of the Company for the year and takes into account the dilutive effect of our share option and restricted share awards.

2020: Adjusted diluted EPS grew to 14.5 pence in line with the increased adjusted profits.

REPORT STRATEGIC

DIVIDEND

8.6P2

	INTERIM			FINAL
2020	1.8p				6.8p			8.6p
2019						5.5p
2018				4.1p		2.6p3	£6.7p
2017				2.9p
2016			2.1p

The Company's dividend policy is to pay between 55% and 80% of adjusted profit after tax.

The Board is recommending a final dividend of 6.8 pence per share bringing total dividend per share to 8.6 pence.

2020: Growth of 56% and the 12th consecutive year that we have raised the dividend.

19

Financial Review

The Board is recommending

a final dividend of 6.8p per share. An increase of 56% for the full year dividend.

20

"The Company's exceptional growth this year has translated into very strong financial results and a 56% dividend increase."

Charlie Ridge

Chief Financial Officer

I am pleased to report very strong financial results and strong growth for all our financial KPIs.

As in previous periods, in order to facilitate comparison of performance with past periods, and to provide an appropriate comparison with our peers, the Board encourages shareholders to focus on financial measures after adjustment for accounting charges or credits arising from the acquisition accounting for Impax NH, and adjustments arising from the accounting treatment of National Insurance costs on share-based payment awards. Further information on these and other alternative performance measures reported is given on page 62.

Financial highlights for financial year 2020 versus financial year 2019

	2020	2019
AUM1	£20.2bn	£15.1bn
Revenue	£87.5m	£73.7m
Adjusted operating profit2	£23.3m	£18.0m
Adjusted profit before tax2	£22.2m	£18.1m
Adjusted diluted earnings per share2	14.5p	11.5p
Cash reserves2	£37.4m	£26.2m
Seed investments	£4.3m	£4.6m
Dividend per share	1.8p interim	1.5p interim
	+6.8p final3	+ 4.0p final
	2020	2019
IFRS operating profit	£17.6m	£18.8m
IFRS profit before tax	£16.7m	£18.9m
IFRS diluted earnings per share	10.5p	12.1p

This year our revenue grew by 19% and our adjusted operating profits have risen by 29%.

1. Assets under management and advice as at 30 September 2020
2. This is an Alternative Performance Measure - see page 62 for definition and calculation
3. Proposed

REPORT STRATEGIC

21

Financial Review continued

REVENUE

Revenue for the Period grew by £13.8 million to £87.5 million (2019: £73.7 million). Growth was driven by continued strong net inflows across the business and robust performance, offset to some extent by the market falls seen in February and March.

Our run-rate revenue at the end of the Period was £96.5 million (2019: £78.3 million), giving

a weighted average run rate revenue margin of 48 basis points (2019: 52 basis points) on the £20.2 billion of AUM.

OPERATING COSTS

Adjusted operating costs increased to £64.3 million (2019: £55.7 million), mainly reflecting planned increases in headcount and higher profit-related pay due to the rising profitability. We continue to invest selectively in the business to take advantage of strong growth opportunities so we expect that there will be some cost increases in the near term.

IFRS operating costs include additional charges and credits, principally the amortisation of intangible assets arising on the Impax NH acquisition, National Insurance charges on share

Impax has a very strong balance sheet. This year our cash reserves increased by £11.2m to £37.4m.

options and restricted shares and in 2019 a credit for the release of a contingent consideration provision related to the NH acquisition. Employer's National Insurance is payable based on the share price when an option is exercised or restricted shares vest and accordingly the charge has increased significantly as our share price has risen over the year. This is offset by a tax credit which is recorded in equity.

PROFITS

Adjusted operating profit increased to £23.3 million (2019: £18.0 million), driven by the revenue growth described above. Run-rate adjusted operating profits at the end of the Period grew further to £28.3 million (2019: £20.5 million), in line with business expansion. IFRS operating profit in 2020 fell to £17.6 million (2019: £18.8 million), as 2019 benefited from the credit for the release of contingent consideration described above. Fair value gains and losses and other financial income partially offset interest expense and finance costs to give adjusted profit before tax of £22.2 million (2019: £18.1 million).

22

We continue to invest in the business to take advantage of the strong growth opportunities.

REPORT STRATEGIC

TAX

Tax rates were lower than last year as the Group benefited from a £1.0 million credit in relation to taxation of the prior year's private equity income.

EARNINGS PER SHARE

Adjusted earnings per share grew to 14.5 pence (2019: 11.5 pence) as a result of the growth in profits.

IFRS earnings per share however fell to 10.5 pence (2019: 12.1 pence) as 2019 benefited from the contingent consideration credit described above.

FINANCIAL MANAGEMENT

At the Period end the Company held £37.4 million of cash reserves, an increase of £11.2 million on 2019. The Company had no debt (2019: no debt) but retains access to a US$13 million revolving facility (the "RCF") (LIBOR plus 3.3%), which was put in place at the time of the acquisition of Impax NH.

The Company continues to make seed investments and to invest in its private equity funds. These investments were valued at £4.3 million at the Period end. During the Period we redeemed £2.0 million by exiting the seed investment in our successful US mutual fund which is managed under the Global Opportunities strategy. The cash realised is planned to be re-invested after the year end into a segregated account investing in our new Asian Opportunities Strategy. We also invested £0.8 million into our third private equity fund.

We adopted the new accounting standard IFRS 16 which covers accounting for leases during the Period. This has required us to recognise new assets, representing the leases on

our office buildings, and a corresponding lease liability.

SHARE MANAGEMENT

The Board intends that the Company will continue to purchase its own shares from time to time after due consideration of attractive alternatives for the use of the Company's cash resources. Shares purchased may be used to satisfy obligations linked to share incentive awards for employees. Share purchases are usually made by funding the Company's Employee Benefit Trusts ("EBTs") which will then settle option exercises or hold shares for Restricted Share awards until they vest.

During the Period, the EBTs spent £4.2 million buying 1.3 million

of the Company's shares at an average price of 332 pence. At the Period end, the EBTs held a total of 5.2 million shares, 4.8 million of which were held for Restricted Shares leaving up to

0.4 million shares available for option exercises and future share incentive awards. Net options outstanding at the Period end were 2.5 million of which 0.1 million were exercisable.

23

Financial Review continued

The Company did not issue any shares in the Period. Equity issuance may arise in respect of staff option exercises or restricted share awards that have not been previously matched by share purchase into the EBTs, and in January 2021, conversion at the Company's discretion into Impax shares of Impax NH management's remaining 16.7% interest in Impax NH.

DIVIDENDS

The Company paid an interim dividend of 1.8 pence per share in July 2020. Last year we announced a new policy of paying, in normal circumstances, an annual dividend within a range of 55% and 80% of adjusted profit after tax. Despite the unforeseen challenges of COVID-19, Impax has reported strong growth in revenue and profits and is in robust financial health. The Board is therefore recommending a final dividend of 6.8 pence. This would be an increase in the total dividend for the year of 3.1 pence or 56%, while still being at the lower end of our stated range.

This dividend proposal will be submitted for formal approval by shareholders at the Annual General Meeting on 18 March 2021. If approved, the dividend will be paid on, or around, 26 March 2021. The record date for the payment of the proposed dividend will be 19 February 2021 and the ex-dividend date will be 18 February 2021.

The Company operates a dividend reinvestment plan ("DRIP"). The final date for receipt of elections under the DRIP will be 5 March 2021. For further information and to register and elect for this facility, please visit www.signalshares. com and search for information related to the Company.

GOING CONCERN

The Financial Reporting Council requires all companies to perform a rigorous assessment of all the factors affecting the business when deciding to adopt a "going concern" basis for the preparation of the accounts.

Our scalable operating platform has led to a 2% increase in our adjusted operating profit margin.

24

REPORT STRATEGIC

The Board has made an assessment covering a period of 12 months from the date of approval of this report which indicates that, taking account of a reasonably possible downside in relation to asset inflows, market performance and costs, the Group will have sufficient funds, to meet its liabilities as they fall due for that period. In making this assessment the Board has considered the potential evolving impacts of COVID-19.

The Group has high cash balances and no debt and, at the Period end market levels, is profitable.

A significant part of the Group's cost basis is profit related pay. The Group can also preserve cash through dividend reduction and through issuance of shares to cover share option exercises/ restricted share awards (rather than purchasing shares).

The Group has operated without disruption during the lockdown periods to date and expects to continue to do so. Consequently, the Directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

Charlie Ridge

2 December 2020

25

Our Investment Strategies and Performance

We hold a strong conviction that population dynamics, resource scarcity, inadequate infrastructure and environmental constraints will create high-growth investment opportunities in companies offering products and services to solve these challenges.

We invest for the long term in companies that are set to benefit from the transition to a more sustainable global economy. We seek to produce superior investment returns for our clients by consistently applying specialist expertise and taking a long term perspective. This means we look for sustainable competitive advantages, track records of consistent returns on investment and good governance, and where we believe a company's long term potential is not reflected in the current share price.

We offer a well-rounded suite of investment solutions spanning multiple asset classes.

Our AUM breakdown by Investment Strategy1

Sustainability Lens Strategies
£4.3bn
Systematic Beta Strategies £0.8bn	£20.2BN
Gender Lens Strategies £0.5bn
AUM
Real Assets Strategies £0.4bn

Environmental Markets Strategies

£14.3bn

1 As at 30 September 2020. Multi Asset Strategy AUM is included within the underlying Strategy. Discrepancy due to rounding

26

REPORT STRATEGIC

Environmental

Markets Strategies

See more on pages 28 and 29

Sustainability Lens

Strategies

See more on pages 30 and 31

Gender Lens

Strategies

See more on page 32

Systematic Beta Strategies

See more on page 32

Multi-Asset Strategies

See more on page 32

Real Assets

Strategies

See more on pages 33 and 34

27

Our Investment Strategies and Performance continued

Environmental Markets Strategies

We are active managers seeking to invest in companies that demonstrate a sustainable competitive advantage, strong track records of consistent returns on investment and robust governance.

Impax's thematic, environmental equity strategies are managed by Impax LN by a team of 24 co-headed by Bruce Jenkyn- Jones who has been at Impax for 21 years, and Hubert Aarts who joined the Company in 2007.

Companies that are classified under environmental markets address a number of long-termmacro-economic themes including growing populations, rising living standards, increasing urbanisation, rising consumption, and depletion of limited natural resources. These powerful drivers have triggered above average growth for a large, rapidly expanding, diverse set

of companies.

Our rigorous investment process seeks to invest in higher quality companies with strong business models that demonstrate sound management of risk. We research

1. well-definedinvestment universe for each of our strategies and then our portfolio construction reflects a combination of high conviction and high financial upside. We use a macro-economic and thematic overlay, as well as undertaking an in-depth integrated review of risk using Environmental, Social and Governance ("ESG") criteria as part of our stock analysis.

Over the Period we saw interest in all our environmental strategies, with the highest net inflows into Specialists and Leaders. The Asia- Pacific strategy also attracted significant new money with the AUM of the strategy increasing by 89%.

Our Leaders strategy invests globally in large cap companies that are developing innovative solutions to resource challenges in the key areas of new energy, water, waste and resource recovery and sustainable food and agriculture. We only invest in companies that generate at least 20% of their revenues from these environmental markets, in practice this exposure is much higher, currently at 56%.

Our Specialists strategy invests in "pure play", small and mid- cap companies which must have more than 50% of their underlying revenue generated by sales

of environmental products or services, (currently exposure is approximately 78%).

Impax was one of the first asset managers to launch a dedicated Water strategy and we have managed a water fund since 2008 on behalf of BNP Paribas Asset Management. This fund, which has seen strong demand from European retail investors, invests

in international water companies whose activity is related to water treatment, purification, infrastructure and municipal services. We also manage a Sustainable Food strategy which includes a fund for BNP Paribas which invests globally in companies that are making food production more sustainable.

Our Asia-Pacific strategy follows the principles and approach of our Leaders Strategy but only invests in the Asia Pacific region. This strategy was our stand-out environmental markets performer for the Period as the region was the first to be severely affected by COVID-19 but markets in the region subsequently staged a strong recovery over the summer.

Companies across the sustainable food chain have seen a significant acceleration of environmental and nutrition-related drivers and growth but share prices in the sector have generally lagged the broader market due to an underweight position in the Technology sector. As a result our Sustainable Food strategy has underperformed the ACWI over one, three and five years, but has performed well against many of its peers and out-performed its specialist comparator index1 by 5.6% over the Period.

1 MSCI ACWI Agriculture & Food Chain Capped (Net Return)

28

REPORT STRATEGIC

Bruce Jenkyn-Jones

Hubert Aarts

Co-Heads of Listed Equities

Fotis Chatzimichalakis		Jon Forster	Sid Jha		Michael Landymore
	Senior Portfolio Manager	Portfolio Manager	Senior Portfolio Manager
Research Analyst

	David Li	Agne Rackauskaite	Justin Winter		Oscar Yang
Senior Portfolio Manager	Portfolio Manager	Portfolio Manager		Portfolio Manager

Percentage returns for one, three and five years

for our environmental equity strategies versus benchmark1,2

Leaders	Specialists	Water
AUM £3,956m	AUM £2,517m	AUM £4,372m

120.4

35.6

14.8

1 year 3 years 5 years

123.1

33.8

13.9

1 year 3 years 5 years

123.5

34.5

9.6

1 year 3 years 5 years

Asia-Pacific	Sustainable Food	MSCI ACWI3
AUM £607m	AUM £762m

107.3

30.4

19.3

1 year 3 years 5 years

73.1

18.3

3.3

1 year 3 years 5 years

91.3

27.6

5.3

1 year 3 years 5 years

Total AUM excludes two accounts that are based on the Leaders and Specialists strategies because they have significantly different objectives and weightings. The total AUM of these accounts is £2.0 billion.

1. In line with market standards, the strategy returns are calculated including the dividends re-invested, net of withholding taxes, gross of management fee, and are represented in sterling
2. AUM as at 30 September 2020
3. MSCI indices are total net return (net dividend re-invested)

29

Our Investment Strategies and Performance continued

Sustainability Lens Strategies

The Impax "Sustainability Lens" translates our investment beliefs into a practical investment tool to help our teams identify the winners and avoid the losers in the transition to a more sustainable economy.

We believe that the transition to a more sustainable global economy provides a compelling rationale to construct high conviction, low turnover equity portfolios that are well positioned to achieve long-term capital growth.

We launched the Global Opportunities equity strategy in January 2015. It is an all cap global strategy which can now

report almost six years of strong out-performance versus global equities. In 2018, St James's Place Wealth Management selected this strategy for their Sustainable and Responsible Equity Fund. Global Opportunities was our fastest growing strategy over the Period with keen interest from investors around the world and a promising mandate pipeline.

Percentage returns for one, three and five years for the Global Opportunities strategy versus benchmark1,2

Global Opportunities

AUM £2,348m

		133.3
	55.6
12.9
1 year	3 years	5 years

MSCI ACWI3

		91.3
	27.6
5.3
1 year	3 years	5 years

1. In line with market standards, the strategy returns are calculated including the dividends reinvested, net of withholding taxes, gross of management fee, and are represented in sterling
2. AUM as at 30 September 2020
3. MSCI indices are total net return (net dividend reinvested)

30

Equities

	Kirsteen Morrison		David Winborne
Senior Portfolio Manager	Senior Portfolio Manager

Andrew Braun		Barbara Browning	Nathan Moser
Portfolio Manager		Portfolio Manager	Portfolio Manager

Fixed Income

	Steve Falci	Peter Schwab		Anthony Trzcinka
Chief Investment Officer	Portfolio Manager		Portfolio Manager
	Impax NH

REPORT STRATEGIC

In addition, we have recently decided to seed a new Asian Opportunities Strategy which leverages the proven process behind our Global Opportunities Strategy, targeting a broader sustainability opportunity set in Asian equities.

Our US Large Cap and US Small Cap funds managed by Impax NH follow a similar regional strategy utilising our "Sustainability Lens" to help identify higher opportunity and lower risk companies that are well- positioned to benefit from the transition to a more sustainable economy. The US Large Cap Fund had a strong year, significantly outperforming its benchmark1 and ranking in the top decile

of its peer group of funds. The US Small Cap Fund lagged its benchmark2 over the Period, but ranked in the second quartile in its peer group over a time that was particularly challenging for US active small cap managers.

We also see investor interest in our fixed income funds managed by Impax NH. These funds utilise the "Sustainability Lens" to identify higher opportunity and lower risk sub-sectors in their respective investment universes. Our proprietary ESG research provides additional fundamental insight to enhance risk management further. A significant portion of the Core Bond Fund portfolio is allocated to impact bonds that promote positive environmental and social outcomes. These include green bonds, community development notes, international development banks and other investments that support climate change mitigation, sustainable infrastructure, affordable housing, education and gender equality. Over the Period, the Core Bond Fund modestly underperformed its benchmark3, whereas the High Yield Strategy has attracted significant investor interest and out-performed its benchmark4, ranking in the top 5% of its High Yield peer group.

1. S&P 500 Index
2. Russell 2000 Index
3. Bloomberg Barclays US Aggregate Index
4. ICE BofAML US Cash Pay High Yield Constrained (BB-B) Index

31

Our Investment Strategies and Performance continued

Gender Lens Strategies

Research indicates that companies with more women in leadership roles have higher returns on capital, greater innovation, increased productivity and higher employee retention and satisfaction.

Impax NH created the Impax Global Women's Leadership Index in 2014. This is the first index of its kind globally, comprising the highest rated companies in the world for advancing women on boards and in executive management. To construct the index our Gender Analytics team rates companies on multiple criteria of gender leadership. These 400+ companies are amongst the best in the world for promoting and advancing gender diversity. We run two strategies, one systematic and one actively-managed, that utilise this index to identify a universe of companies with gender diverse leadership. The AUM of these strategies totalled $645 million at Period end. The Global Women's Leadership Strategy, our systematic gender lens strategy,

trailed its benchmark1 for the Period, but maintained its strong long-term track record.

In 2019, in response to investor interest, we launched and seeded the Impax Global Women's Select strategy. This actively-managed strategy invests

in companies with gender-diverse boards and senior leadership teams, a commitment to workplace equality, and products & services that advance women. Our differentiated bottom-up approach draws on Impax's proprietary gender research and sustainability lens, including insights, rankings and analysis. We seek to deliver excess return through a portfolio of companies demonstrating attractive fundamental prospects and gender equality profiles. This managed strategy significantly outperformed its benchmark over the Period.

Scott LaBreche

Portfolio Manager

Barbara Browning

Portfolio Manager

Sid Jha

Portfolio Manager

Systematic Beta Strategies

Our three systematic beta strategies utilise SmartCarbonTM, a proprietary risk-based investment approach for managing exposure to companies with fossil fuel reserves on their balance sheets.

Multi-Asset Strategies

Our Multi-Asset Strategies invest across all of Impax's strategies. They offer investors a risk-focused asset allocation strategy through diversification across a variety of US equity, US fixed income, developed non US equity and global thematic investment strategies.

The Pax Sustainable Allocation Fund, with a rich heritage as the oldest US sustainable mutual fund, has evolved into a multi-asset Fund of Funds strategy investing across a wide range of Pax World Funds. It performed strongly over the last year, ranking in the top 10% of its peer group of similar multi-asset strategies.

1 MSCI World Index

Steve Falci

Chief Investment Officer

Impax NH

32

Real Assets Strategies

The Real Assets team follows an industrially- focused, value-add strategy, investing in renewable power generation, including solar, on-shore wind, hydropower and related assets. Currently all our assets are in Europe.

REPORT STRATEGIC

Daniel von Preyss		Carsten Johansen
Head of Private Equity		Managing Director,
Infrastructure	Head of Transaction Team

Hector Boyce	Rhiann Gray		Babaola Omiyale
Associate Director	Director		Associate Director

Our real assets business is managed by Daniel von Preyss and Carsten Johansen. Daniel has worked at Impax for 11 years and now heads this part of the business. Carsten joined the Company in 2019 and is responsible for originating and negotiating new investments and supporting Daniel in the management of this business.

Impax is one of the longest established private equity fund managers in the large and rapidly growing renewable energy infrastructure sector. The business proved highly resilient during the global pandemic, with minimal disruption to construction. Currently the focus is on key projects in our third fund, Impax New Energy Investors III ("NEF III").

NEF III development projects

Ownership of operating wind asset

Ownership of wind pipeline1,2

Ownership of operating solar assets

Ownership of solar pipeline1,3

Ownership of solar asset

Ownership of operating small-hyrdo asset

Ownership of small-hyrdo pipeline1,4

Development team

Operations/Construction + Late-stagedevelopment/

Permitted/Further pipeline102MW + 398MW

1	"Pipeline" encompasses in construction,
	ready-to-build,late-stage development
	and permitted as well as the wider
	pipelines of our existing development
	platforms	0MW + 105MW
2	Includes the construction
	of 10MW in Germany
3	Includes the construction
	of 54MW in France
4	Includes the construction
	of 27MW in Norway

30MW + 33MW

110MW 18MW

+ 382MW

33

Our Investment Strategies and Performance continued

Real Assets Strategies continued

Operational hydro power plant at Sagelva, Norway

These include construction work on a large (300+ MW) wind and solar portfolio in France where we have made substantial progress this year. In Germany our current focus is on onshore wind with two operational projects, one in construction and advancing our developing pipeline of close to 400MW.

In Norway the construction of our joint venture hydro project almost 50MW is on schedule.

In addition, construction of our 110MW PV project in the Netherlands (one of the country's largest solar parks) is well advanced with over half the plant now producing electricity and full operation expected by the end of 2020.

Impax New Energy Investors II (NEF II) has been successfully wound down and just has two small remaining assets where we are assessing our exit opportunities and expect to liquidate the fund during 2021.

We see increased support among governments and the broader public to accelerate the build out of renewable infrastructure assets, and this has risen higher up agendas as a result of the global pandemic, with a heightened commitment from many European governments to greening the economy. There is high demand from investors for access to these investments and we are currently considering our future plans to develop this area of the business further.

34

Beyond Investment Returns

Bringing about lasting positive change is a long-term commitment requiring active engagement with our investee companies and we appreciate the importance of measuring change over time.

REPORT STRATEGIC

Since our foundation in 1998, Impax has been intentionally directing funds towards areas of the market that are providing solutions to sustainability challenges, demonstrating that these can be sound investments and thus lowering the cost of capital for companies delivering a positive impact through their environmental products and services.

In 2020, for the seventh consecutive year, Impax was awarded A+ and A scores across all applicable categories in the UN-backed Principles for Responsible Investment (PRI) assessment report of Environmental, Social and Governance (ESG) integration efforts. The Group is rated above the peer median in every category and obtained the highest score, A+, for its overarching approach to ESG strategy and governance. In addition, Impax earned an A+ for ESG integration in Private Equity achieving 30 stars out of a maximum of 30. The PRI also rated Impax A+ across

all applicable Listed Equity categories and the Group improved its score to A for all Fixed income categories.

In addition, in November 2020, Morningstar described Impax as a "Leader" for its ESG Commitment, one of only six asset managers globally to be awarded the highest grade.

We intentionally design our investment strategies around the opportunities arising from the transition to a more sustainable economy. We therefore believe that our portfolio companies have resilient business models. Companies that stand to benefit from this shift are, for instance, less carbon intense and are not reliant on, or impact negatively on, natural resources. They

are also more inclusive and value and encourage diversity, including gender and ethnic or racial representation. In this context Impax engages to support and encourage investee companies to manage risks, rather than to radically change their core activities.

Engagement with companies is evolving with an increasing understanding and agreement that investors must move away from merely counting the numbers of engagements done with companies, and move to assessing in more detail and rigour what the actual 'outcomes' were. This is the key objective of the recently updated UK Stewardship Code. Impax has taken this approach for many years but we welcome this industry-wide shift in emphasis. In future investors will increasingly be setting out engagement objectives and rigorously assessing contribution to change from engagement activities versus positive developments already being undertaken.

35

Beyond Investment Returns continued

Engagement

"Engagement is an important activity in managing risk and building relationships with investee companies."

Lisa Beauvilain

Executive Director, Head of Sustainability & ESG

This work can be divided into the four following types:

1

2

Promoting improved practices and transparency on ESG issues

Bottom-up company specific monitoring and dialogue

3

4

Top-down strategic engagement priorities

Proxy voting and corporate governance

In 2019 we prioritised four strategic areas of engagement:

Physical	Sustainability and	Diversity and	Corporate
climate risk	ESG advisory	pay-equity	governance
			best practice

Our latest Engagement Report is available on our website. This gives further details on our wide range of activities and several interesting case studies.

OUR RECORD1

101

In 2019 we engaged with 101 companies, or close to half of all our owned companies…

152	10%
…across 152	...with more than 10% of
engagement meetings…	companies having more than
	two engagement meetings
	throughout the year.

1 Data for calendar year 2019, latest available

36

REPORT STRATEGIC

ENGAGEMENT UPDATE (CALENDAR YEAR 20191)

Every year we engage with a significant percentage of our portfolio companies in the thematic and global unconstrained equity investment portfolios. Over the course of 2019, Impax conducted 101 engagements, across 152 meetings, and achieved 40% positive outcomes.

FOCUS
Environmental	Social
41%	22%
Governance
37%
41% in 2019

Environmental focus grew significantly, from 28% in 2018, to 41%, mainly driven by our strategic focus on physical climate risk engagements.

REGION
Asia	EU
32%	26%
RoW	US
2%
	40%
32% in 2019

Engagements with Asian companies grew, from 11% in 2018 to 32%, mainly driven by our strategic Asian focus.

ACTIVITY
Proxy Voting	EG advisory
related	21%
15%
Bottom-up	Top down
ESG related	strategic issues
48%	16%

No major changes in the types of engagements 2018 vs 2019.

EVOLVING PRIORITIES

The COVID-19 pandemic has brought many sustainability issues into sharper focus, especially in the 'S' - the social aspect - of ESG. In the year ahead we will direct additional time and resources to this area, taking a close look at developing methodologies for further integrating and quantifying aspects of human capital in our company analysis, as well as drilling down further into supply chains, and in particular what these mean

in the knowledge economy.

All these areas have been of concern to sustainable investors for a long-time; the pandemic has brought them into the spotlight for many more.

We are also focusing on the safety and support for "essential workers". The staff who work for many of our portfolio companies are considered to be in this category, for example many of those working for utilities, waste companies and food retailers.

In addition, this year many companies were forced to change their working practices and business operations. We will be asking companies in our portfolios to hone the systems they use for remote work arrangements, including re-skilling their workforces where necessary, so they have the infrastructure and skills needed to accommodate

a decentralised workplace. We are also extending our policy engagement work to encourage governments to take this opportunity to "Build Back Better".

40%

We noted positive outcomes in more than 40% of the companies we engaged with directly related to the engagement objectives set.

14%

In 14% of cases we believe that this positive outcome was largely driven by Impax's engagement efforts.

1 Latest available data

37

Beyond Investment Returns continued

Impact@Impax 2020

"At Impax every portfolio is intentionally designed to direct our clients' capital towards a more sustainable economy. Our impact reporting delivers post-investment evidence of this intentionality."

Meg Brown

Executive Director, Marketing & Business Development

Our impact reporting metrics include carbon emissions avoided, renewable energy generated, water treated, saved or provided, materials recovered and waste treated, and coal use displaced in Asian cities.

This year, we expanded the strategies on which we report to include the Sustainable Food and Water strategies. We have included net carbon metrics for the Global Opportunities portfolio and mapped it against the UN Sustainable Development Goals (SDGs) for the first time.

Measuring impact is an evolving discipline, with a proliferation of methodologies and techniques, and none of the consistency that regulation and international standardisation has brought to financial accounting. It is therefore important to set our impact reporting in context, especially

with regard to the sustainability challenges that our portfolio companies are confronting.

We assess companies' climate impacts against the objectives of the 2015 Paris Agreement.

The Agreement aims to hold the rise in global average temperatures to no more than

2oC above pre-industrial levels, with the ambition to keep this temperature rise below 1.5oC. To understand this in the context of the global economy, these goals can be translated into figures for maximum allowable emissions per unit of investment.

In addition to a company's net carbon impact we also evaluate their water use, waste production and pollution.

There is growing emphasis among companies that are significant users of water, or which are located in water-stressed regions,

on collaborating with other local users. We have been particularly pleased to see leading water technology companies within our portfolios proactively collaborating with other industrial water users, including their clients around water catchment area management.

We consider waste avoidance in the context of the 'Circular Economy', the concept that designing products and materials for re-use will help avoid excessive natural resource depletion and waste generated.

Local air pollution caused by particulate matter is a major public health concern in cities around the world, particularly in Asia. We track reductions enabled by portfolio companies in terms of equivalents of tonnes of coal displaced, for example through investment in natural gas distribution and supply.

NET CO2 IMPACT PER US$10 MILLION INVESTED FOR ONE YEAR

4,000
2,000
0	800-1,700	200
	-200	-300
-2,000	1,700-3,800			-1,400
-4,000				-3,300	-3,600
-6,000					-5,300

Economy

1,2

Water

Smart

Global

Leaders

-

Specialists

Energy

Asia

Economy2050)

3

3

3

3

3

3

strategy

3

2*C

(by

strategy

strategy

strategy

strategy Impax

strategyNew strategy

Global

Impax

Impax

Impax

Impax

Pacific

Impax

Impax

Food

Opportunities

These figures refer to the past. Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you have invested.

1. Source: United Nations Framework Convention on Climate Change (UNFCCC), 2016. Aggregate effect of the intended nationally determined contributions: an update - synthesis report by the secretariat, McKinseey Global Institute, The Global Carbon Project, Haver, BIS, Deutsche Bank estimates, and IMF, National Central Banks and Statistical Offices, Thomson Reuters, Black bars reflect the range of estimates of value invested
2. The upper limit for global temperature rise targeted by the Paris climate agreement
3. Impax Asset Management, 2019. Impax's impact methodology is based on equity value

38

REPORT STRATEGIC

ALIGNMENT WITH THE UN SUSTAINABLE DEVELOPMENT GOALS

The UN Sustainable Development Goals (SDGs), agreed in 2015, comprise a series of 17 sets of targets to be met by 2030. A growing number of asset owners are seeking to assess how their investments contribute to the SDGs, as a means of measuring their impact. We have undertaken a mapping exercise to show

how our strategies align with these goals when considering revenue exposure to related activities. Impax's classification of the Environmental Markets investment universe and Sustainability Lens frameworks enables us to link portfolio company activities to the most relevant SDG.

Mapping Impax strategies to UN Sustainable Development Goals

	100
	80
(%)
exposure	60
Revenue	40
	20
	0
	Impax	Impax	Impax	Impax	Impax	Impax	Impax
	New Energy	Specialists	Asia-Pacific	Water	Leaders	Global	Sustainable
	Infrastructure	strategy	strategy	strategy	strategy	Opportunities	Food
	strategy					strategy	strategy

Source: Data as at 31 December 2019. Figures are based on Impax internal data. Adopted by FTSE as a basis for Environmental Technologies and Environmental Markets index series since 2007. For our Sustainable Food strategy, we have also mapped to SDG 2, with a focus on sustainable food production and agriculture, not an 'environmental SDG'.

Our Impact@Impax 2020 report is available on our website. This gives further details on our impact measurement and reporting.

39

Our People

"Fostering the right values and business behaviours at Impax is a cornerstone of the Company's success."

Keith Falconer

Chairman

Impax aims to work with all our stakeholders to make a contribution to the development of a sustainable society and have a positive impact on the environment, particularly by supporting or undertaking relevant research and engaging or collaborating with others.

In addition, we seek to provide a stimulating, collaborative and supportive workplace for our colleagues.

The people who work for Impax make it what it is. We have a strong business culture that exemplifies our key values and we recognise the value of all our colleagues - their skills, experience and dedication. Maintaining a productive and engaged staff during a global pandemic has been challenging but has also helped highlight some areas where we can improve and strengthen our commitment to all our people.

Achieving our vision and business goals requires a high-performing environment where we can help everyone to deliver their personal best, adapt and learn continuously, and stay ahead

in an increasingly competitive arena. To this end, we recently announced a major new project around our people to help us grow our business and build our organisation in this complex and fast changing world.

Maintaining a productive and engaged staff during a global pandemic has been challenging but has also helped highlight some areas where we can improve and strengthen our commitment to our staff.

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REPORT STRATEGIC

We have clearly articulated our five core Values that we stand by to guide our actions and decision-making.

Be the	A passion for	All voices	Doing better	Building
solution	excellence	valued	together	a common
				future

Our Values have been communicated across Impax. Underpinned by these Values, we have defined key behavioural competencies which will enhance our core HR processes.

These competencies will be embedded in our hiring and interview process throughout next year, and form part of our performance management, promotion and compensation decisions by end of 2021.

"Findings from recent employee surveys and focus groups have prompted us to step up our internal communications."

Ian Simm

Chief Executive

41

Our People continued

To be successful in today's world we require people managers to be flexible, dynamic and constantly seeking opportunities to build their skills.

We are increasing our investment in leadership training and education for all our people managers to drive a common, consistent standard across our business.

We continue to assess the perception of leadership in our surveys and opinion polls.

"We focus on building the optimal skills to direct, empower, coach, support and delegate in an inclusive way."

Mary Alexander

Global Head of HR

We want to unlock the potential of our talented colleagues and to create more opportunities for continuous development.

We provide educational talks and workshops to deliver valuable support in enabling personal development and career plans. We are also seeking input from a senior

group of leaders in shaping our future talent plans and initiatives to ensure we gain traction across all areas of the business.

"We're very proud of our talent: we aim to empower and provide a clear pathway for every individual's career development."

Bruce Jenkyn-Jones

Executive Director, Co-Head of Listed Equities

42

We are increasing our investment in leadership training and education.

We strive to be a diverse, inclusive business where we leverage different perspectives in decision-making and innovation, and create a sense of belonging.

REPORT STRATEGIC

This October we set up a Equality, Diversity and Inclusion ("ED&I") group, chaired by Ian Simm, Chief Executive, and Joe Keefe President, of Impax North America with Lindsey Brace Martinez as the Non-Executive Director sponsor of this group. The group has a mandate

to recommend how we can strengthen our capabilities and results in this area.

For example, we will now be looking at all our people practices through an ED&I lens. We seek to ensure our policies are inclusive, our candidate lists are diverse and avoid unconscious bias.

Further details on this key initiative follow on pages 46 and 47.

"We're increasing access to opportunities for young people via intern work experience initiatives

• for example, by participating in the 100 Black Interns programme."

Hubert Aarts

Executive Director, Co-Head of Listed Equities

As we grow and operate as an integrated international business, our HR policies and processes must be global, comprehensive and promote sound governance.

We continue to update and improve our HR policies and procedures with easy staff access via a new internal platform.

"Our new HR initiatives are designed to deliver enhanced learning on health and wellbeing in the workplace."

Joe Keefe

President, Impax North America

43

Our People continued

Our highly-experienced Executive Committee

IAN SIMM1

Founder and Chief Executive

Ian founded Impax in 1998. Prior to Impax, he was an engagement manager at McKinsey & Company advising clients on environmental strategy. Outside Impax, Ian is a member of the UK Government's Energy Innovation Board, which provides strategic oversight

of public sector funding of energy innovation programmes. He is a board member of the Institutional Investors Group on Climate Change, the Transitions Commission, and a member

of the CBI's Energy & Climate Change Board.

HUBERT AARTS2

Co-Head of Listed Equities,

Executive Director

Hubert is co-portfolio manager for Impax's Leaders and Water strategies, as well as leading Impax's macroeconomic research process. Hubert joined Impax

in 2007 from Cambrian Capital Partners LLP, where he was a partner and portfolio manager of the Curalium fund and Incremental Leveraged hedge funds. Having started his career in 1990, he has extensive experience investing in Pan-European equities. As a portfolio manager at MeesPierson and Merrill Lynch Investment Managers/BlackRock, where he chaired the European Sector Strategy Group.

MARY ALEXANDER3

Global Head of HR

Mary is the Global Head of Human Resources. Prior to joining Impax in 2020, Mary worked in several senior roles across digital businesses and mature industries. Her early HR career spanned FMCG/manufacturing multinationals including BAT, Anglo American and PayPal, latterly as VP Human Resources for EMEA, Asia Pacific and the Americas. Mary was EVP for HR for Colt Technology, a Fidelity-owned company, before moving into private equity in a senior role at Montagu PE.

LISA BEAUVILAIN4

Head of Sustainability & ESG,

Executive Director

Lisa is responsible for the development and oversight of Impax's Sustainability and Environmental, Social and Governance (ESG) analysis, including overseeing stewardship work in the Listed Equity team. She is the Chair of Impax's ESG, Sustainability Lens and Environmental Committees and co-heads Impax's impact investment work. Lisa started

in the financial industry in 1999. Previously, she was an executive director in the Investment Management Division of Goldman Sachs.

MEG BROWN5

Executive Director, Marketing

& Business Development

Meg leads marketing across Impax and the London-based sales team. Meg also co-heads our impact investing work. She has extensive experience in sustainable investing and research, having begun her career in 2002. As head of Citi's Climate and Sustainable Investment Research team she worked with clients across Europe on impact and responsible investment. Meg joined Impax in 2014 following

a period as a consultant helping private sector and not-for- profit clients design responsible investment strategies.

BRUCE JENKYN-JONES6

Co-Head of Listed Equities,

Executive Director

Bruce has an active role in the day to day management of all Impax Listed Equity portfolios and is on the portfolio construction team for all strategies. Bruce joined Impax in 1999 where he worked initially on venture capital investments before developing the Listed Equity business. Before joining Impax, he worked as a utilities analyst at Bankers Trust and as an environmental consultant for Environmental Resources Management (ERM).

1

2

3

4

5

6

44

REPORT STRATEGIC

DARREN JOHNSON7

Chief Operating Officer - Listed

Equities, Executive Director

Darren is responsible for global operations, including portfolio services, technology, project management and client onboarding. He also serves as

1. Non-ExecutiveDirector of Impax Asset Management's Irish subsidiary. Prior to Impax, Darren was Head of Operations at Talisman Global Asset Management. He has also worked for RAB Capital, AXA IM, Mercers, and Legal & General in various senior investment, operational, and accounting positions.

JOSEPH KEEFE8

President

Joe is President of Impax North America. Prior to joining the firm in May 2005, Joe was President of NewCircle Communications, he has served as Senior Advisor for Strategic Social Policy at Calvert Group from 2003-2005 and as Executive Vice President and General Counsel of Citizens Advisers from 1997-2000. He is a former member of the Board of Directors (2000-2006) of US SIF. Before entering the investment management industry, Joe worked in private law practice for 16 years.

DAVID RICHARDSON9

Executive Director, Client Service

& Business Development

David leads Client Service and Consultant Relations across Impax, as well as managing the Institutional Sales team in North America. David joined Impax in August 2012 from Global Energy Investors where he was a Managing Partner. He previously co-founded and served for 22 years as Managing Director

of Dwight Asset Management Company. David is a member of the Global Leadership Council and the Sustainable Investment Advisory Council of the World Resources Institute.

CHARLIE RIDGE10

Chief Financial Officer

Charlie began his career in 1987. Before joining Impax he was a Managing Director within the Finance Division of Deutsche Bank, most recently serving as UK Asset and Wealth Management CFO, and previously holding various financial and market

risk related roles for the Global Markets Division. Before working at Deutsche, Charlie worked at SG Warburg and qualified as a chartered accountant at Ernst & Young.

DANIEL VON PREYSS11

Head of Private Equity

Infrastructure, Executive Director

Daniel joined Impax in 2009 and has primary responsibility for our renewable infrastructure private equity investments. He is both involved in investments and is Head of Asset Management. Daniel has significant business and senior transactional experience within the energy and utility sectors. Before joining Impax he was responsible for Babcock & Brown's Northern European infrastructure activities where he focused on regulated utilities, gas storage and broader power generation.

ZACK WILSON12

Group General Counsel,

Executive Director

Zack serves as Group General Counsel and is also Company Secretary. Prior to joining Impax in 2011, Zack was Director

• General Counsel for the investment management and corporate finance advisory group Development Capital Management. Previously he was Corporate Counsel for Telewest Global Inc (renamed Virgin Media Inc), where he played a leading role in managing the successful execution of high-profile transactions including the Group's $10bn financial restructuring.

7

8

9

10

12

45

Our People continued

Equality, Diversity and Inclusion

Equality, Diversity and Inclusion is a key pillar in our People strategy and in enabling our commercial success.

We have continued to raise our ambitions for our ED&I agenda by establishing a global team tasked with increasing accountability and governance.

This year, as an important development of our work to build on our Culture and Values programme, we set up our ED&I group. This group is taking practical steps across a number of areas, which include:

• Employee opinion polls and listening groups on equality, diversity and inclusion with a full review of the results by our Executive Committee.
• Training of all employees in how to identify and avoid unconscious bias, and the launch of a Company-wide initiative in building skills in giving and receiving feedback.
• Investment in inclusive leadership training as a

requirement for all people managers in the Company.

• Introduction of Impax's behavioural competency framework to strengthen the robustness of our decision- making in hiring, promotion and rewards.
• A review of recruitment processes and engagement with third parties to ensure diverse short-lists and interview panels.

"We believe that diverse teams make better decisions and are more innovative. An inclusive environment enables people to deliver their best, go the extra mile and remain committed to the firm."

Ian Simm

Chief Executive

46

REPORT STRATEGIC

"We are partnering with organisations focused on inclusion and widening access to our industry for young people from all social backgrounds. This includes working with the Investment Association's "Investment 20/20" programme, supporting Sponsors for Educational Opportunities, and participating in an executive mentoring programme for diverse senior women across all industries."

Darren Johnson

COO of Listed Equities and co-executor of the ED&I group

The global ED&I Group has listened to employee feedback, examined market best practice and our assessed priorities. In the coming year we will address:

• Leadership: setting qualitative goals and providing tools for our people managers to promote accountability for ED&I progress in the firm.
• Talent & Attraction: continuing to extend the potential talent pool in our hiring efforts, including attracting more diverse candidates to our internship programmes, and engaging with recruiters with a track record in diversity practices.

• Data & Benchmarking: working with a skilled external partner to gather data directly and confidentially from employees across different facets of diversity and conduct meaningful analyses.
• Awareness: establishing regular conversation groups - 'safe spaces' for our colleagues to discuss and learn about race and ethnicity.
• Social Impact: identifying and supporting specific organisations advancing equality and creating opportunities for diverse groups.

47

Our People continued

Gender Perspective

Gender is a key facet of our overall equality, diversity and inclusion agenda. We are focused on helping all colleagues reach their full potential and on addressing inclusion holistically, on the basis that none of us is defined by one aspect of our identity alone.

At the end of the Period, we employed 172 permanent staff across our global business, with a total of 77 women accounting for 45% of our workforce. A quarter of our Executive Committee is female. Two of five of our Non- Executive Directors are female. Across the job levels in the firm, women are well represented in junior and mid-level staff groups, 59% and 47% respectively. In the most senior level group, the representation of women is 32%.

Our gender pay gap analysis, which compares average base pay of men and women across all positions in three groups - junior staff, mid-level staff and senior staff - shows that the pay gap increases according to seniority. At the junior level, the gap is 2.5%, rising to 9.9% at the mid-level staff, and to 18% at the most senior level. The firm's low staff turnover and infrequent hiring into senior roles are major reasons why these gaps exist.

We remain focused on increasing the number of women in our business, especially at senior levels, and to the continued examination of in-level

pay differences, including using robust external pay benchmarking data. Our ongoing review of our working patterns will enable more flexible working and part-time working and allow us to expand our talent pool. We are paying particular attention to opportunities to raise Impax's diversity when assessing new potential recruits. Our senior global Equality, Diversity

• Inclusion Group has prioritised gender as a key area of attention. See further details of our ED&I efforts on page 46.

We are committed to making progress in these areas and recognise that meaningful change requires dedication, focus and time.

A quarter of our Executive Committee and two of five of our Non-Executive Directors are female.

We remain focused on increasing the number of women in our business, especially at senior levels.

48

REPORT STRATEGIC

We are committed to making progress in these areas and recognise that meaningful change requires dedication, focus and time.

Gender diversity

2020	55%		45%
2019	57%			43%
2018	55%		45%
		Male		Female

Gender by job level1

Senior staff
32.3%			67.7%
Mid-level staff	46.9%				53.1%
Junior staff	56.9%					43.1%
		Male		Female

Gender pay gap - average base salary1

Senior staff
18.2%
Mid-level staff	2.5%
Junior staff	9.9%

1 Data as at 5 April 2020 for Group staff. 2020 global data represents a baseline for the future. 2019 data are not comparable as do not include the integration of Impax NH data

49

Building a Common Future

Our role in the community

We encourage our colleagues to play an active role in the community for the benefit of both our business and society.

Impax is committed to its role to contribute to the local community and we encourage our colleagues to volunteer and play an active role for the benefit of both our business and society.

This year, in response to the heightened demand for charitable donations and services as a result of the COVID-19 pandemic, we considerably raised our financial support for charities selected by our staff. We also increased the paid volunteering time allowance for everyone. Many colleagues have shown an extraordinary

commitment to supporting their Volunteering at Great Bay Kids' Company in Newmarket (Impax NH)

local communities; working to reach those in need and the most vulnerable at this difficult time. For example, several individuals have been supporting key workers through meal donation and providing transport to NHS workers in the UK.

Volunteering at The Causeway Hospital (Impax LN)

50

REPORT STRATEGIC

Many colleagues have made a huge commitment this year to supporting their local communities in these difficult times.

Impax NH staff volunteered over 170 hours with 18 organisations.

In the US, Impax NH employees are granted up to four days paid leave to undertake volunteer work for an established non- profit, or community service organisation of their choice. As part of this programme, Impax NH regularly participates in the United Way's and Gather Food Pantry's group volunteer opportunities in the seacoast community of New Hampshire.

Furthermore, Impax NH has partnered with the New Hampshire Charitable Foundation to establish the Impax Asset Management LLC Charitable Fund to administer corporate donations and sponsorships to

47 charities and organisations. In addition, at the start of lockdown in March, Impax LN staff voted for charities they wished to support through the pandemic and consequently made donations

to THET, UK Red Cross and The Connection. In October 2020 staff from all our offices have been fundraising for Sponsors for Educational Opportunities (SEO), through participation in the Mindful Movement Challenge.

In the UK, Impax continues to promote tax efficient payroll giving for staff through the Charities Aid Foundation Give as You Earn (GAYE) scheme. This enables staff to donate regularly by monthly payroll to charities of their choice. Impax pledges to match all staff charitable donations up to £500 (US$750 in the US) a year. Over the Period the number of staff contributing via GAYE has grown by 6% to 26%. Impax was recently awarded the highest platinum status

by GAYE as an outstanding participant in the scheme.

51

Building a Common Future continued

Supporting organisations that are closely aligned with our values

Impax continues to increase its support for a small number of charities which are dedicated to building a more sustainable economy.

We believe that we have strong synergies with these charities and our financial support, which we have increased year-on-year, not only helps the work of these outstanding organisations but also helps to build on both our thought leadership work and employee development and engagement.

Ashden supports proven climate innovation in the UK and developing countries. Organisations providing these on-the-ground solutions will be instrumental in driving the changes our planet needs.

Ashden is a London-based charity working in the field of sustainable energy and development. Ashden believes that organisations that are on the frontline of the climate crisis are creating something better: a planet powered by low-carbonstart-ups, bold green policies, liveable cities, better work and clean energy for all. The charity has supported these innovators for two decades, helping them attract investment and funding, build their networks, and create radical change.

Impax is pleased to continue its support for the Ashden Awards which now spans nine years.

Every year an Impax team assists Ashden with the evaluation process for the award and choosing an outright winner from a large number

of high-quality submissions is always a difficult decision at the end of a rigorous review. Ian Simm also sits on the Ashden judging panel for the Liveable Cities award and two international awards. We maintain a long-term relationship with winners of the award and our staff are involved in on-going mentoring programmes. This year the Impax Ashden Award for Energy Innovation was awarded to Guru Systems.

Guru Systems makes energy systems more transparent, lower cost and lower carbon. Delivering low-carbon heat is one of the biggest challenges in the transition to a net-zero emissions future. Most heat networks today run on natural gas, in the future this fuel supply can be switched to sustainable technologies such

as heat pumps. Guru Systems' hardware and data analytics help to accelerate this transition by using AI-driven analytics

to improve efficiency. In their application the company highlighted how its heat network software particularly helps social housing tenants.

Up to 50% reduction in household energy bills

500,000 district heating customers in the UK, on 17,000 heat networks

30,000 Guru Hubs sold, saving 18,000 tonnes CO2 emissions per year

52

REPORT STRATEGIC

Since 2016, Impax has supported ClientEarth, a not for profit environmental law organisation which uses the power of the law to protect people and the planet.

ClientEarth is well known for its stand against the UK government on urban air pollution and its work with the European Commission to reduce single use plastics through the implementation of plastic taxes. This year its legal action helped put an end to Poland's last planned coal plant and its interventions are helping to pave the way for new clean alternatives to enter the EU market. It is expanding its work, with the launch of a new agriculture project and a particular focus on stopping the planned expansion of coal plants in Asia.

Impax is also a member of a number of organisations focused on the investment management industry where we work collaboratively with peers to support the expansion of sustainable finance. The full list of our memberships can be seen on page 61 of this document.

53

Building a Common Future continued

Our environmental impact: committed to Net Zero

Impax's emissions arising from operations and investment are in aggregate net carbon positive today.

As an investment manager specialising in the transition to a sustainable economy, the greatest contribution Impax can make to achieving the goals of the Paris Climate Agreement is through our core activities, namely our investment decisions, engagement with the companies in which we invest, our collaboration with clients and stakeholders and policy advocacy.

Since 2015, we have measured and reported the environmental benefits linked to our investments in terms of the net carbon impact, together with other key environmental metrics including renewable energy generated, water treated, saved or provided; materials recovered and waste treated. (Further details are on pages 55 and 56). Over the last five years we have expanded the coverage of this analysis, and our recent 2020 Impact @ Impax report included independently assured figures for the net carbon impact of seven of our investment strategies, which in aggregate represent approximately 80% of our assets under management. We intend to expand this approach to cover additional strategies over time.

Furthermore, we are also committed to monitoring and reducing our own operational emissions across Scope 1 (direct emissions), Scope 2 (emissions relating to electricity consumption) and Scope 3 (largely business travel). We have taken a number of steps to reduce these emissions over recent years as detailed below.

Overall, when we consider our equity portfolios, the carbon savings from the direct investments we make in our infrastructure funds (which fund the construction of new renewable power generation assets), our emissions arising from operations and investment are in aggregate net carbon positive today (i.e. carbon avoidance exceeds emissions). We pledge to maintain that position in the future.

Furthermore, we are committed to the continuous improvement of our practices. We will review these to ensure that our approach remains best in class given the numerous "Net Zero" and Paris alignment frameworks, standards and methodologies emerging ahead of COP26, due to be held in Glasgow in November 2021.

Since 2015, we have measured and reported the environmental benefits linked to our investments in terms of the net carbon impact, together with other key environmental metrics.

54

REPORT STRATEGIC

During the pandemic we have all learned to work more effectively via virtual channels. We hope that in future we will be able to report less business travel and lower Scope 3 emissions.

OUR GHG EMISSIONS, ENERGY CONSUMPTION AND ENERGY EFFICIENCY MEASURES

This year we have embraced the requirement to report our operational emissions in line with the new Streamlined Energy and Carbon Reporting (SECR).

Overall, our total market-based GHG emissions have decreased significantly compared to the previous year. The biggest contributor to our carbon footprint is business travel. The lockdown measures and travel restrictions, and consequent shift to virtual working, have resulted in our business travel emissions (Scope 3 emissions) dropping by 75% year-on-year. However, over the longer term, our business travel is unlikely to remain at such a low levels but, with enhanced technology, we have all learned to work more effectively via virtual channels and we are confident that we will be able to report significantly less travel and lower Scope 3 emissions than prior to the global pandemic.

Over the Period, our total global electricity consumption was 301 MWh. With London accounting for 60% of the total, the New Hampshire office 38% and Hong Kong 2%.

All our offices are in shared buildings where energy efficiency measures are centrally managed and largely out of our control. Our London headquarters are a certified green building (rated "excellent" by BREEAM and managed by an ISO 14001 aligned BMS), and we have been adjusting the systems where we can to minimise inefficiencies and seek energy saving opportunities. In our New Hampshire office we took the decision to stop using fossil fuels to heat the building and instead installed an electricity powered heat pump, which is the reason for a 10% increase in overall electricity consumption. On an intensity basis, AUM growth outweighs this increase in electricity consumption-related emissions. Electricity consumption in our other offices was significantly lower compared to previous years, which was to a large extent a result of the offices being closed for an extended period.

Our Carbon Emissions

				Change	Change
	2020	2019	Change	t CO2e /	t CO2e /
	(t CO2e)	(t CO2e)	(%)	FTE (%)	AUM (%)
Operational emissions: Scope 1&2, electricity
consumed, market-based approach	31.931	24.929	+28%	+14%	-4%
Value chain emissions: Scope 3,
business travel	82.854	329.102	-75%	-78%	-81%
Impax AM: Total emissions
(market-based)	114.785	354.030	-68%	-71%	-76%

55

Building a Common Future continued

Impax currently purchases 98% of its electricity from renewable sources.

Performing against our 2019 stated targets1:

Scope 2 target:

To source 100% renewable energy across all Impax offices.

In October 2020 the New Hampshire office joined London in purchasing all its electricity from renewable sources. We currently source 98% of our total electricity requirements from renewables.

Scope 3 targets:

We are in the process of introducing measures to reduce travel-related emissions, for example by seeking to substitute short haul air travel by rail or coach where possible, and we favour video conference meetings whenever practicable.

We have reviewed our caterers and food suppliers with a view to procure more sustainable catering. In future, food served at Impax offices will be predominantly vegetarian.

Physical Climate Risk

We have assessed the physical climate risks to all our offices and concluded that these risks are relatively low. Notable future climate hazard exposures are heat and water stress to the Metro NYC office (although our business is not water-dependent) and elevated river or coastal flood risk at the Portland, Oregon and Portsmouth, New Hampshire and HK offices. Storm risk is also significant at the Hong Kong office, where we are increasing our understanding of the adaptation in place to mitigate related risks. Overall, our assessment indicated that the main risks were to connecting infrastructure and transport- related. Therefore our business continuity plans are critical. These are tested regularly, most recently under COVID-19 restrictions, and proved to be very resilient.

1 Scope 1 emissions - London (HQ), Portsmouth, (NH, USA) and Hong Kong offices: the heating requirements of these offices, which are all in shared buildings, are largely out of our control and the cost/accounting wrapped into the overall service charge portion of our rental agreements. We continue to work with building managements to find a method of estimating respective consumption attributable to our offices

Scope 1 & 2 emissions - Greenwich, CT US & Portland, OR US offices: These are two very small offices (combined they account for <10 of Impax employees) with respective emissions from operational use likely to be immaterial in magnitude compared to the three main offices covered in this disclosure

Details of the methodology used:

Reporting according to the GHG Protocol: Scope 2 emissions figure stated above follows the market-based accounting methodology. Following a location-based approach, and disregarding the positive impact of renewable electricity procurement, total is 156 tonnes CO2e.

Sources of emission factors applied to calculate emissions from electricity consumption: IEA (2019) UK electricity grid mix emission factor; IEA (2019) Hong Kong China electricity grid mix emission factor; eGRID (2018) NEWE NPCC New England subregion electricity mix emission rate; Green-e (2020) NEWE NPCC New England subregion residual electricity mix emission rate.

Sources of emission factors applied in Scope 3 (air travel) emissions calculations: Susterra air travel emissions assessment methodology, aligned with EAA, DEFRA and a development of ICAO methodology (calculations based on route, carrier, travel type and travel class).

56

Risk Management and Control

The Board strives to achieve a balance between appropriate levels of risk and return.

REPORT STRATEGIC

HOW WE MANAGE RISK

FIRST LINE:

Business units

• Involved in day-to-day risk management
• Follow a risk process
• Apply internal controls and risk responses

Impax has adopted a risk management framework which takes into account the key principles of risk identification, risk measurement, risk mitigation, risk monitoring and reporting. The Board strives to achieve a balance between appropriate levels of risk and return and to ensure that the risks taken by the firm are appropriately managed.

Although the Board sets the overall business risk strategy and appetite, all staff are responsible for identifying, monitoring and reviewing risks across their team and business functions.

	SECOND LINE:			THIRD LINE:
	Risk and compliance			Audit
•	Oversee and challenge		•	Review first and
	first line risk management			second lines
•	Provide guidance		•	Provide an independent
	and direction			perspective and challenge
•	Maintain enterprise risk			the process
	management framework		•	Objective and offer
				assurance

The Chief Risk Officer is responsible for maintaining an enterprise risk management framework, including an ongoing programme to monitor internal controls and processes designed to mitigate the risks identified. This includes reporting to the Group's Audit and Risk Committee on a quarterly basis.

The principal risks that the Group faces are described in this section. Further information on financial risk is given in note 29 to the financial statements.

All staff are responsible for identifying, monitoring and reviewing risks across their team and the Group.

57

Principal Risks and Uncertainties

RiskDescription

Reputational Reputational risk can

riskarise from any of the key risks described below and relates to the Impax brand and relationships with our stakeholders.

Market risk	The Group's Listed Equity
	business charges management
	fees based on AUM and
	accordingly its revenue is
	exposed to market risk.
	The Group seeds investments
	in its own Listed Equity funds
	in order to build a track record
	to market those funds more
	effectively. It is therefore
	directly exposed to the market
	performance of the funds.
	The Group also invests in its
	own Private Equity funds and
	is therefore exposed to the
	performance of these funds.
Currency	A significant percentage of
risk	Impax LN's business income is
	based on assets denominated
	in foreign currencies whilst
	the majority of costs are
	in sterling.
	For the Impax NH business the
	majority of income is based
	on assets denominated in US
	dollars and all costs are in
	US dollars.
	Goodwill and intangible
	assets arising on the Impax
	NH acquisition are held in
	US dollars.

How we mitigate the risk

Integrity and appropriate conduct are an integral part of the Impax culture and values, and all our business dealings. The integrity and reputation of staff is regularly assessed, and the controls below help to mitigate the risk

of incidents that may have a reputational impact.

The Group operates a number of different strategies which themselves are diversified by geography and industry. The Group's investment teams have to follow defined investment processes. All investments are overseen by the Group's Investment Committees. The Group attempts to mitigate this risk through the use of hedging instruments where appropriate and intends to divest from these investments when commercial and market conditions allow.

For the year ended 30 September 2020, and on an on-going basis, the Group's strategy for the Impax LN business has been to put in place hedges, in the form of forward rate contracts, where there is sufficient predictability over the income to allow for an effective and cost-efficient hedge. Otherwise foreign currency income is converted to sterling as soon as practically possible after receipt.

58

Our Chief Risk Officer is responsible for maintaining an enterprise risk management framework.

REPORT STRATEGIC

Risk	Description
Liquidity	Liquidity risk in relation to client
risk	portfolios is the risk that funds
	cannot be generated to meet
	redemptions or other obligations
	as they arise. Liquidity issues
	can arise as a result of market
	conditions or through holdings of
	illiquid investments.
	Liquidity risk also applies to the
	Group's own financial obligations,
	in the event that cash resources are
	insufficient to meet liabilities as they
	fall due.
Credit	The Group is exposed to the risk
risk	of counterparty default. Our
	counterparties include banks holding
	the Group's cash reserves.
Regulatory	The Group's operations are subject
risk	to financial services legislation and
	regulations, including minimum
	capital requirements and compliance
	requirements, in each of the
	jurisdictions in which it operates.

How we mitigate the risk

We actively monitor the liquidity of individual stocks and portfolios. Adjustments to fund holdings are made where necessary to ensure that we are able to meet fund redemptions.

The Group's approach to managing its own liquidity risk is to ensure that it has sufficient cash on hand to meet liabilities when due under both normal and stressed conditions, and to satisfy regulatory requirements. The Group produces cash flow forecasts covering a 12 month period. The Group's management and Board review these forecasts. As shown in note 21 to the financial statements the Group has adequate cash reserves.

The Group seeks to manage this risk by only depositing cash with institutions with high credit ratings and by allocating its cash holdings to at least four institutions at any time.

The Group seeks to manage these risks by ensuring close monitoring of compliance with the regulations, and by tracking regulatory developments and reacting promptly when changes are required. The Group has a permanent and independent compliance function. In view of the future regulatory uncertainty following Brexit, Impax has established a legal entity in Ireland to mitigate any potential disruption to our business model and clients.

People	The success of the Group depends
risk	on the support and experience of
	its key employees, and in particular
	of its senior managers. The loss of
	key employees could have a material
	adverse effect on its result or
	operations.

The Group seeks to manage this risk by offering competitive remuneration packages, including share schemes and carried interest in Private Equity funds, and by creating a supportive and enjoyable working environment. We have developed robust succession and development plans. The senior investment team has been stable for many years.

59

Principal Risks and Uncertainties continued

Risk	Description	How we mitigate the risk
Operational	Operational risk arises	The Group has established control
risk	in our investment	frameworks so that the risk of financial
	management activities,	loss to the Group through operational
	distribution activities	failure is minimised. As part of this the
	and in the operation	Group obtains full "ISAE 3402" internal
	of our corporate	controls assurance every year, for its
	infrastructure.	UK Listed Equity business.
		Impax also maintains plans to manage
		operational business risks in the case
		of an emergency or crisis situation.
		These involve specific responses to
		enable business contingency and
		recovery procedures.
		The Group has insurance cover
		which is reviewed each year prior to
		policy renewal.
Cyber	Cyber attacks against	The Group has put in place measures
risk	financial services firms	to minimise and manage possible
	are growing in number	technology risks and to ensure the
	and sophistication and	safety of data and compliance with
	would result in business	data protection legislation.
	disruption and/or	Information and cyber security is
	data loss.
	enforced throughout the business. This
		ensures devices such as laptops and
		mobile devices are fully protected.
		All staff globally receive regular cyber
		awareness training. In addition, external
		and internal penetration tests are carried
		out on an annual basis. We also carry
		out Company-wide phishing tests, and
		have global security certifications.

60

Auditor's Statement

The auditor's report on the financial statements and the auditor's statement under section 496 of the Companies Act on whether the information given in the Strategic Report and Directors' report for the financial year ended 30 September 2020 is consistent with the Group financial statements were both unqualified and can be found on pages 18 to 22 of the Governance and Financial Report.

Memberships

Impax is a member of a number of organisations focused on the investment management industry where we work collaboratively with peers to support the expansion of sustainable finance. Here is a selection of our current memberships.

REPORT STRATEGIC

Asian Corporate Governance Association (ACGA)

Carbon Disclosure Project (CDP)

Ceres

Climate Financial Risk

Forum (CFRF)

Confederation of British

Industry (CBI)

Council of Institutional

Investors (CII)

Energy Transitions

Commission (ETC)

The Forum for Sustainable and Responsible Investment (US SIF)

Global Impact Investing Network (GIIN)

Institutional Investors Group on Climate Change (IIGCC)

Interfaith Center on Corporate Responsibility (ICCR)

Investor Environmental Health Network (IEHN)

NH Businesses for Social Responsibility

Principles for Responsible Investment (PRI)

Shareholder Rights Group

Taskforce on Climate-related Financial Disclosures (TCFD)

Thirty Percent Coalition

UK Stewardship Code

UK Sustainable Investment and Finance Association (UKSIF)

UN Global Compact (UNGC)

61

Alternative Performance Measures

The Group uses the following Alternative Performance Measures ('APMs').

ADJUSTED OPERATING PROFIT, ADJUSTED PROFIT BEFORE TAX AND ADJUSTED PROFIT AFTER TAX

These APMs exclude the impact of the following items:

• amortisation of intangible assets which arose on the acquisition of Impax NH;
• charges in respect of equity incentive scheme related to the acquisition of Impax NH;
• fair value movements in contingent consideration payable on the acquisition of Impax NH; and
• mark-to-marketcharges in respect of National Insurance payable on share awards

These performance measures are reported as they facilitate comparison with prior periods and provide an appropriate comparison with our peers. Excluding amortisation of intangible assets arising from acquisitions is consistent with peers and therefore aids comparability. It also aids comparison to businesses which have grown organically, and do not have such charges. Fair value movements on contingent consideration are excluded as they are one-off items and not representative of the operating performance of the Group. Mark to market charges in respect of National Insurance are excluded as they arise due only to changes in the share price and therefore do not reflect the operating performance of the Group.

A reconciliation to the relevant IFRS terms is provided in Note 4 of the financial statements.

ADJUSTED OPERATING MARGIN

This is calculated as the ratio of adjusted operating profit to revenue. This number is reported as it gives a good indication of the underlying profitability of the company and how this has changed year on year.

ADJUSTED EARNINGS

PER SHARE AND ADJUSTED EARNINGS PER SHARE

This is calculated as the adjusted profit after tax divided by the diluted number of shares used in the calculation of IFRS diluted earnings per share. The adjusted profit after tax is also reduced by the IFRS adjustment for profit attributable to owners of restricted shares (see note 13 of the financial statements).

This is used to present a measure of profitability per share in line with adjusted profits.

A reconciliation to IFRS diluted earnings per share is shown in note 4 of the financial statements.

RUN RATE REVENUE AND RUN RATE ADJUSTED OPERATING PROFIT

Run rate revenue is the revenue that the Group would report if the AuM for the year remained static at that shown at 30 September and fee rates were those at 30 September. Run rate revenue margin is the ratio of run rate revenue to AuM.

Run rate adjusted operating profit is the run rate revenue less adjusted operating costs for the month of September extrapolated for 12 months. Adjustments

are made to exclude any one- off items.

Run rate numbers are reported as they give a good indication of the current profitability of the Group.

CASH RESERVES

Cash reserves is the sum of cash and cash equivalents and cash held in money market accounts or fixed term deposit accounts less cash held in research payment accounts and cash held by consolidated funds. The calculation of cash reserves is shown in note 21 to the financial statements.

Cash reserves are reported as they give a good indication of the total cash resources available to the Group.

62

Contact Details

SECRETARY	REGISTRARS
Zack Wilson	Link Asset Services
REGISTERED OFFICE	The Registry
34 Beckenham Road
7th Floor	Beckenham
30 Panton Street	Kent
London	BR3 4TU
SW1Y 4AJ	NOMINATED ADVISER
T: [phone]
AND BROKER
F: [phone]	Peel Hunt LLP
Moor House
	120 London Wall
	London
	EC2Y 5ET

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63

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IMPAX ASSET MANAGEMENT GROUP PLC

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Impax Asset Management