what is java:comp/env?

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.

It's an in-memory global hashtable where you can store global variables by name.

The "java:" url scheme causes JNDI to look for a javaURLContextFactory class, which is usually provided by your app container, e.g. here is Tomcat's implementation javadoc

See also NamingManager.getURLContext