Add environment variable support for stdio MCP servers

[Copilot]

Enables passing environment variables to stdio MCP servers via mcp.json configuration. Supports literal values and ${VAR} substitution from system environment.

Changes

• Config model: Added env: Optional[Dict[str, str]] field to MCPServerConfig
• Client initialization: Extract env from config, resolve ${VAR} patterns, pass to StdioTransport
• Error handling: Server initialization fails gracefully if referenced env var is unset
• Tests: 6 new tests covering literal values, substitution, empty dict, missing vars
• Documentation: Added section to admin guide with examples and security notes
• Demo Server: Added env-demo MCP server in backend/mcp/env-demo/ that demonstrates the environment variable capability with three tools: get_env_var, list_configured_env_vars, and demonstrate_env_usage

Usage

{
  "my-external-tool": {
    "command": ["wrapper-cli", "my.external.tool@latest"],
    "cwd": "backend",
    "env": {
      "CLOUD_PROFILE": "my-profile-9",
      "CLOUD_REGION": "us-east-7",
      "API_KEY": "${MY_API_KEY}"
    }
  }
}

The env field only applies to stdio servers; HTTP/SSE servers ignore it. Missing env vars during substitution cause initialization failure with clear error logging.

Demo Server

The env-demo server is configured in both config/defaults/mcp.json and config/overrides/mcp.json and includes:

• Example configuration with both literal values and ${VAR} substitution

• Three tools demonstrating environment variable access and usage patterns

• Complete documentation in backend/mcp/env-demo/README.md

• Fixes allow setting env values for individual mcps #81

Original prompt

---

This section details on the original issue you should resolve

<issue_title>allow setting env values for individual mcps</issue_title>
<issue_description>For example.

"env": {
"CLOUD_PROFILE": "my-profile-9",
"CLOUD_REGION": "us-east-7"
},

So on the mcp.json.

{
"my-external-tool": {
"command": [
"wrapper-cli",
"my.external.tool@latest",
"--allow-write"
],
"cwd": "backend",
"env": {
"ENV_VAR_1": "",
"ENV_VAR_2": ""
},
"groups": ["users"],
"is_exclusive": false,
"description": "External MCP server for XYZ functionality",
"author": "Team Name",
"short_description": "Access XYZ APIs via external MCP server",
"help_email": "support@example.com",
"compliance_level": "Public",
"require_approval": [],
"allow_edit": []
}
}</issue_description>

Comments on the Issue (you are @copilot in this section)

• Fixes allow setting env values for individual mcps #81

---

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[github-actions]

🔒 Security Scan Results

Security Scan Summary

Scan Results

Python SAST (Bandit)

⚠️ Security issues found in Python code

Recommendations

• Review all SARIF files uploaded to GitHub Security tab
• Address high and critical severity vulnerabilities immediately
• Run npm audit fix and pip-audit locally to fix dependencies
• Consider implementing additional security controls

[github-actions]

🔒 Security Scan Results

Security Scan Summary

Scan Results

Python SAST (Bandit)

⚠️ Security issues found in Python code

Recommendations

• Review all SARIF files uploaded to GitHub Security tab
• Address high and critical severity vulnerabilities immediately
• Run npm audit fix and pip-audit locally to fix dependencies
• Consider implementing additional security controls

[garland3]

@copilot please add a new mcp server in the backend folder (backend/mcp) which demostrates this capability.

[Copilot]

@copilot please add a new mcp server in the backend folder (backend/mcp) which demostrates this capability.

Added env-demo MCP server in backend/mcp/env-demo/ that demonstrates the environment variable capability. The server includes three tools:

1. get_env_var - Retrieves specific environment variable values
2. list_configured_env_vars - Lists all configured environment variables
3. demonstrate_env_usage - Shows practical usage patterns

Configured in both config/defaults/mcp.json and config/overrides/mcp.json with example environment variables including literal values and ${VAR} substitution. Complete documentation in backend/mcp/env-demo/README.md.

Commit: 157de27

[github-actions]

🔒 Security Scan Results

Security Scan Summary

Scan Results

Python SAST (Bandit)

⚠️ Security issues found in Python code

Recommendations

• Review all SARIF files uploaded to GitHub Security tab
• Address high and critical severity vulnerabilities immediately
• Run npm audit fix and pip-audit locally to fix dependencies
• Consider implementing additional security controls

[github-actions]

🔒 Security Scan Results

Security Scan Summary

Scan Results

Python SAST (Bandit)

⚠️ Security issues found in Python code

Recommendations

• Review all SARIF files uploaded to GitHub Security tab
• Address high and critical severity vulnerabilities immediately
• Run npm audit fix and pip-audit locally to fix dependencies
• Consider implementing additional security controls