Environment variables are a set of dynamic named values that can affect the way running processes will behave on a computer.

That's Wikipedia. Let's read it again. Dynamic - because they can change. Named - because like any other variables, they have names. Affect processes - this is the most important part. Environment variables tell the program in what context it is running - what's the current language, where is user's home directory etc. They can also store configuration for the process. For example, a popular cloud hosting platform (Heroku) exposes configuration values to the app as environment variables.