One option is to get a cheap third party hood designed for the Leica Summilux lens, to screw into the front 46mm filter thread. However, this hood adds some bulk to the lens, making it less compact. The compactness is one of the desirable features of the Lumix 20mm pancake in the first place.
In an attempt to find a low profile hood that looks more like the hood for the Pentax 40mm f/2.8 pancake lens, I bought a cheap 46mm to 37mm step down ring. The ring is essentially a short cylinder with 46mm threads on the outside, and 37mm threads on the inside.


Step up and step down rings should be used with care with the Lumix 20mm pancake. When powering down, the lens retracts the front assembly slightly into the chassis, which will jam and possibly damage the focus mechanism if you attach a ring which is too wide. The following picture shows that this step down ring is not too wide, and can be safely used with the Lumix 20mm pancake lens:

Looking at hoods, you will note that they are usually ribbed and matte on the inside. This is to avoid having light reflected into the lens. Since the inside of the step down ring is threaded, it already has the right shape. However, the metal is still a bit shiny. To make it more matte, I applied some matte black enamel paint on the inside threads. Wanting to retain the stealthy look of the lens, I also painted the front and the side of the ring:

Here is the lens with the "home made" hood attached. This hood does not cause any additional vignetting.

You will probably want to have a front lens cap as well, and you can get a 37mm cap which fits into the front threads of the step down ring. Both the step down ring and the front lens cap can be found on various auction sites.