Environment Variables Every process carries with it a set of environment variables. These variables may also be inherited by child processes. Some of these environment variables have pre-defined meanings, such as PATH, TERM, HOME and the like. Environment variables may also be "inherited" across network connections. For example, when one connects with 'telnet' to another machine, some of the environment variables are passed (via the 'telnet' protocol) to remote telnet daemon, and are defined for the shell that it spawns.