One way to do this is as follows:
The final specific gravity (1.02) is the weighted average of the two specific gravities of the components. The weights are the volume fractions. Let f be the volume fraction (of the final volume) of the water to be added. The volume fraction of the original milk is (1-f). This leads to the equation:
f (1.00) + (1-f) 1.032 = 1.02. {The specific gravity of pure water is 1.00}
This equation can be solved for f yielding f = .012/.032 = 3/8.
Thus the final mixture will be 3/8 water and 5/8 original milk (by volume)
Let Vtot be the volume of the mixture. Then (5/8) Vtot = 20 m3 This implies Vtot = 32 m3 .
So the volume of water to be added is (3/8) 32 = 12 m3.