java:comp/env is the node in the JNDI tree where you can find properties for the current Java EE component (a webapp, or an EJB).
Context envContext = (Context)initContext.lookup("java:comp/env");
allows defining a variable pointing directly to this node. It allows doing
SomeBean s = (SomeBean) envContext.lookup("ejb/someBean");
DataSource ds = (DataSource) envContext.lookup("jdbc/dataSource");
rather than
SomeBean s = (SomeBean) initContext.lookup("java:comp/env/ejb/someBean");
DataSource ds = (DataSource) initContext.lookup("java:comp/env/jdbc/dataSource");
Relative paths instead of absolute paths. That’s what it’s used for.