Typical high end portrait lenses for film based cameras are 85mm f/1.4. The focal length corresponds to around 42-45mm for Micro Four Thirds. Many zoom lenses available for Micro Four Thirds will give you this focal length option. However, the largest aperture of these zoom lenses is generally much smaller than f/1.4.
One prime lens which comes close is the Lumix Leica 45mm f/2.8 macro. However, while this lens has a larger aperture than the zoom lenses, it is still far from f/1.4, and I am sure some will find it limiting for portrait usage.
Another lens comes close in the aperture department. It is the Panasonic Lumix 20mm f/1.7 pancake. However, this lens is quite a bit wider than most portrait lenses. So can you use it for portraits?

Let's take a look. When talking about portraits, let's say that we mean a picture in which the face fills the majority of the frame. When using the Lumix 20mm pancake lens, this is what we get, when going close enough to fill the face into the frame:

As you can see, the face is distorted. The nose and chin looks too large. This is due to getting very close to the face. The distortion is not a property of the wide lens. The distortion is related to the distance to the face. The closer the distance, the more distortion. With a longer focal length, you can stand at a longer distance when photographing, to avoid distortion.
So let's try a longer focal length. Here is the same face filled into the frame using the Lumix 45-200mm f/4-5.6 at 45mm:

The effect is very clear: 45mm is sufficient to get a proper perspective. The nose and chin now looks natural, and not artificially large, like in the picture taken at 20mm.
This picture was taken at 1m (3.3 feet) distance, which is the closest you can get with the 45-200mm lens. This is probably no coincidence. I'm guessing Panasonic designed the lens so that it could be used to take a headshot at the shortest focal length.
It is also interesting to see that the out of focus discs (bokeh) are about similar sizes in the two images. This means that f/4 at 45mm gives about the same background blur as f/1.7 at 20mm, when filling a face into the entire frame. Of course, the 20mm image was taken at a closer focus distance.
In a previous paragraph, I said that the distortion is related to the distance to the subject. So the solution is very simple: When using the Lumix 20mm pancake lens, take a step backwards. With the same distance as in the 45mm image above, the perspective should also be the same. Here is the outcome when using the 20mm lens at 1m (3.3 feet) distance:

In this example, there is no apparent distortion. However, the downside is of course that the face only fills a part of the frame. Also, the background is less blurred, since the focus length was larger.
The Lumix 20mm lens is very sharp. Especially in the centre region. So what you can do, is to crop the centre out of the image. Here is what I get using that method:

Of course, you might want to include a bit of background, and not crop as tightly as I have done here.
Conclusion
So can you use the Lumix 20mm lens for portraits? Yes, but don't stick the camera in the face of the subject. At a distance of about 0.7m (2 feet) or more, the face distortion should not be noticeable. If you need to, you can crop off a bit of the borders, to get a closer portrait.
Of course, you could take a so called "environmental portrait", in which you don't just shoot the face, but include some more of the person, and some elements around him or her. In that case, it makes good sense to use the 20mm lens. In fact, I'd say the Panasonic Lumix 20mm f/1.7 pancake is a perfect lens for environmental portraits.
Here is an example environmental portrait taken with the GH2 and the 20mm f/1.7 lens. The image parameters are: f/2, 1/60 second, ISO 1600.
You could even use the Lumix 14mm f/2.5 wide angle prime lens for environmental portraits. As long as you keep a distance to the face of around 2 feet or more, you should not get any excessive distortion. On the other hand, if you photograph a sitting person head on, his knees will look abnormally large this way, due to the perspective.