Normally you can not create a folder outside the root path i.e. if you have your application in say C:\inetpub\testapp
you can only create a folder inside testapp. This restriction is for security reason where a web server is not supposed to allow access to anything above root folder.
Moreover it's not recommended to write any folders/files in the root folder as writing to root folder cause appdomain to recycle after certain number of writes (default is 15) causing session loss. See my answer here.
However there is a workaround
Add a path of your server to web.config and then fetch it in your code.Use something like below in the appsettings section of web.config
<add key="logfilesPath" value="C:\inetpub\MyAppLogs" />
Create a folder of above path and add Users
group to your folder and give that group full permission (read/write). (Adding permission is very important)
In your code you can fetch as below
string loggerPath = (ConfigurationManager.AppSettings["logfilesPath"]);
Hope this helps