In hierarchical models, density fluctuations on different scales are correlated. This induces correlations between dark halo masses, their formation histories, and their larger-scale environments. In turn, this produces a correlation between galaxy properties and environment. This correlation is entirely statistical in nature. We show how the observed clustering of galaxies can be used to quantify the importance of this statistical correlation relative to other physical effects which may also give rise to correlations between the properties of galaxies and their surroundings. We also develop a halo model description of this environmental dependence of clustering.