Hello Ram,
Environment Variables are stored by the OS, so if a program asks the OS what a specific file / data is, the OS can respond with it.
Such Environment Variables are used by R/3 installations too. For example: such variables show where the database files are stored, perhaps some Java data will be also read, etc.
Environment Variables are some basic OS administration "tools", therefore if youare not familiar with them, leave them to an OS Administrator.
Otherwise, it is normal that R/3 software reads them.
Best regards,
Laszlo