The natural environment, commonly referred to simply as the environment, encompasses all living and non-living things occurring naturally on Earth or some region thereof. Also, it is contrasted with the built environment, which comprises the areas and components that are strongly influenced by humans. A geographical area is regarded as a natural environment, if the human impact on it is kept under a certain limited level.

Adopted from:http://en.wikipedia.org/wiki/Natural_environment

The natural environment emcompasses all living and non-living things. This means that everything surrounding us, living or non-living, is the environment.

In the definition, the phrase 'built environment' means that the environment is also contrasted with man-made objects that is strongly influenced by humans.

Summary:

The environment is basically everything around us, despite their differences.